The Effects Of The Development Of Intermediary Business On The Efficiency Of China Commercial Banks

With the development of financial market, china's commercial banks are challenged by newly developing financial instruments. What's more, they also suffer from the supervision of regulators about leverage ratio, liquidity, reserve ratio and capital requirements. Under the instruction of China Banking Regulatory of Commission, commercial banks try to develop intermediary business to bring more profits. However, the researches on the intermediary business don't give a precise conclusion that the development of intermediary business will promote the efficiency of commercial banks. Due to this, this paper will focus on the appropriateness of the development of intermediary business from three aspects: macro economy, industry and internal of banks. The quadratic model is used to analyze the threshold effect of the development of intermediary business. The conclusion of this paper is that the threshold effect exists and it will not be changed by the difference of ownership. If the ratio of intermediary is higher than the threshold, the development of intermediary business will restrain the efficiency of banks.