A Study On The Scope Economies Of Commercial Banks' Intermediary Business In China

Since 30 years of China's reform and opening up,we set up a sound system of the financial.The reform of the financial system also made many significant achievements.In our country,the degree of comprehensive financial in financial institutions is continually deepening.The course of financial disintermediation is to speed up,and the interest rate marketization deepens.Especially under the background of China's New Normal,the traditional profit model of Commercial Banks is facing the challenge.At the same time,Domestic commercial Banks are also facing the market competition pressure from foreign banks;especially the foreign banks have high-end technical support and rich experiences in financial services.So Domestic commercial Banks are get to know the strategic position to promote intermediary business.Though in recent 10 years the banking intermediary business in China shows the trend of growth,but generally the development level of our country banking intermediary business is very low,especially compared with developed countries.For example,our country banking intermediary business income accounted for less than 20%in 2012,but in 2004 the US banking intermediary business income proportion is more than 45%.As a result,study in the profit pattern of non-interest income which is a very important strategic meaning and realistic meaning to improve the scope economy effect of the banking industry in China.The purpose of this paper is to explore the development of intermediary business for the banking industry whether to have a scope economy effect,how much scope economy effect is and how to improve the economic effect of scope.At first,it's a summary of the basic theory of the intermediary business of commercial bank and the banking economies of scope.At second,we will analyze the development status and influences of the intermediary business of commercial bank.Then based on the above analysis of the Generalized Tran slog Cost Function from the perspective of revenue change to empirical analysis.We also should combine with the development of foreign banking intermediary business experiences.At last,we get the conclusions and policy recommendations.The paper selects the relevant data which are 15 domestic commercial banks from 2005 to 2014 to empirical analysis.We can see from the empirical results:The intermediate business of Domestic commercial Banks is the existence of scope economy effect.To develop intermediary business will improve the business income ofcommercial banks.In addition,the economic effects of scope of the state-owned commercial banks are higher than Joint-stock commercial banks,but the gap is narrowing.