Research On The Microcosmic Effect Of City Commercial Banks' Branch Deregulation

After the turn of the century and the wave of restructuring,with the improvement of business service and the scale,an increasing number of city commercial banks began to seek a broader space for development through trans-regional business,thus standing out from the fierce bank competition.The wave of trans-regional business not only brings the development and opportunities,but also makes some potential problems emerge.For instance,the branches of some banks still can not turn around and the accumulation of bank's internal risks,etc.,combined with the external economic environment challenges the banking business,the effect of trans-regional business will bring to the city commercial banks themselves and its influence on bank's profitability and risk taking are of reality significance in terms of enhancing the overall strength of city commercial banks and the benign development of their own.This paper is based on the development of city commercial banks,it focus on and further analyzes as well as deconstructs the micro effect of trans-regional business of city commercial banks,on such basis,the research on time effect,scale effect and distant effect included in the micro effect has been conducted mainly from the two levels to investigate the influence of trans-regional business of city commercial banks on bank performance,the first level emphasizes the advantages and disadvantages of trans-regional business and its overall effect,while the second level further explores the mechanism of action and effectiveness of the scale effect,time effect and distance effect behind the overall effect.On the basis of theoretical analysis,this paper uses the panel data of 67 city commercial banks from 2008 to 2014 to do empirical analysis of the micro effect of the trans-regional business of city commercial banks.Such conclusions have been drawn as followings:On the whole,the trans-regional business of city commercial banks has generally improved the profitability of banks while taking fewer risks,namely,it has improved the bank performance;specifically,the trans-regional business shows obvious scale effect that the optimal improvement of bank performance could be achieved by an appropriate scale of trans-regional business;On the time-effect,there is a process of the trans-regional business influence in time,the early trans-regional business would significantly reduce the current profitability and risk of city commercial banks;On the distance-effect,the farther the average distance between different branches and the headquarters is,the profitability would decline slightly while the risk-taking would be significantly improved.According to the theoretical analysis and empirical results,this paper proposes some suggestions to promote the benign development of city commercial banks from the two aspects of bank strategy and regulatory policy.From the strategic view of the bank itself,it is necessary to actively promote the trans-regional business,pay close attention to the connotative development,and reasonably make the trans-regional business strategy as well as focus on the provincial expansion under prudent operation.From the perspective of regulatory policy,regulators should plan and adjust the layout of the trans-regional business from the policy level and guide to establish the multi-level banking system.