An Empirical Study Between CAR,Financial Disintermediation And Banks’ Operations

Since the explosion of financial crisis,our economic structure is being adjusted.The traditional development model of commercial banks which is treating the capital scale as the driving force of interest is no longer fitting today’s big environment, as its extensive way of development led to an over saturated market. The bank restructuring is gradually put on the schedule. Meanwhile, the promulgation of ‘Basel III’ is so strict on requiring the capital adequacy ratio that the commercial banks have to make big changes to fit on it. Besides, interest rate liberalization and financial disintermediation are reducing banks’ interest profits. As the core of the whole finance, its restructure will bring a bright future for chinese economy. So it’s vital to discussing this topic under the new circumstance.This paper induced related theories of the new situation which includes ‘Basel III’,interest rate liberalization, financial disintermediation and so on, and confirmed the research thought and purpose. This paper collected newest data under the new circumstance, and built some pointed model to analyze the relationship between bank’s performance and selected indicators.The main research work of this paper contains three parts. Firstly, the paper selected and diagramed the sample data from 16 representative commercial banks’ financial statements since 2007 to 2014. The sample banks could be divided into three kinds by their nature, which includes state-owned banks, joint-stock banks and city banks. And then, the paper analyzed main operational indicators such as capital adequacy ratio, leverage, provisioning rate, and discussed the relationship between these indicators and banks’ ROA. At the same time, this part offered some advices to both banks and supervisors. Next, the paper using two indicators which are ADRE(assets disintermediation revised effect) and LDRE(liabilities disintermediation revised effect)to determine the impact of financial disintermediation on banks. The results showed that assets financial disintermediation had more influence on state-owned banks than the other two banks, but the liabilities financial disintermediation influenced the joint-stock banks more deeply. Overall, financial disintermediation impacts the joint-stock banks more deeply than state-owned ones.There are three value-added contributions in this paper. The first one is that updating the data of this study field to 2014 year by WIND database and other banks’ annual reports which ensured the effectiveness of this paper. Secondly, this paper used two separated empirical models to discuss the impact from the current external financial environment, which was different from traditional theoretical researches. Lastly, the selected frontier indicators such as Z-score, ADRE, LDRE are making the study more accurately.