Analysis On The Impact Of Financial Disintermediation On The Performance Of Commercial Banks

The phenomenon of financial disintermediation first appeared in the United States in the 1960 s.Because the United States experienced an economic depression in the 1930 s,the federal reserve issued regulation Q to deal with the economic depression,announcing that it would not pay interest on demand deposits,and set a ceiling on the interest rate of savings deposits and time deposits,namely,it would control the deposit interest rate.Regulation Q did play a positive role in the restoration of financial order after the depression and the recovery of the American economy after World War II.In the '60 s,however,due to the existence of the deposit interest rate cap,plus when the inflation phenomenon is relatively serious,other investment targets on the market interest rate is far higher than the interest rate for the savings deposit payment,bank deposits,attractive to investors fell sharply,making money continuously streaming out from the bank,as the original cause of the financial disintermediation.Since the reform and opening up,China's social financing pattern has always been dominated by indirect financing in the banking system,while direct financing in the financial market only plays an auxiliary role.Until 1990,Shanghai stock exchange and shenzhen stock exchange were established,the bond market began to develop rapidly,the direct financing market began to take shape,and financial disintermediation began to occur in China.Since then,with the deepening of the financial system reform under the leadership of the Chinese government and the rapid development of the financial market,the financial disintermediation in China has presented an increasingly significant deepening trend.In 2006,bank of communications hosted the "seminar on business strategies of commercial Banks under the background of financial disintermediation",which made clear the existence of financial disintermediation in China and drew the conclusion that financial disintermediation will exist and develop in China for a long time.But at the same time,financial disintermediation also brings opportunities and challenges to the transformation and upgrading of Banks' traditional business.With the deepening development trend of financial disintermediation in China,it has become an urgent task for commercial Banks to maintain the steady operation of commercial Banks and take financial disintermediation as an opportunity to transform traditional businesses and explore new profit growth points.This paper selects panel data of 21 a-share listed commercial Banks from 2010 to 2018 to empirically study the impact of financial disintermediation on the traditional business of China's commercial Banks.The explained variables select six indicators to evaluate the operation performance of Banks and construct the comprehensive indicators of commercial Banks' operation robustness.Three indicators of quantitative financial disintermediation were selected as explanatory variables from three aspects of asset disintermediation,liability disintermediation and disintermediation correction effects,and asset size and cost-income ratio were added to the model as control variables.Then,the samples were divided into three groups: full samples,state-owned Banks and non-state-owned joint-stock Banks,and the panel data multiple regression model was constructed.Through Hausman test and other test methods,appropriate panel data models were selected for the three groups of sample models.The empirical results show that asset disintermediation has a positive impact on the business performance of China's commercial Banks.The higher the degree of asset disintermediation is,the better the bank's robustness will be.The positive impact of asset disintermediation on state-owned Banks will also be greater than that of non-stateowned joint-stock Banks.The impact of debt disintermediation on the performance of China's commercial Banks is negative.The higher the degree of debt disintermediation,the worse the robustness of the Banks,and the negative impact of debt disintermediation on state-owned Banks is greater than that on non-state-owned jointstock Banks.Disintermediation correction effect influence on our country commercial bank disintermediation disintermediation no assets and liabilities,but still influence the performance of commercial Banks,with assets and liabilities disintermediation,disintermediation correction effect of state-owned Banks is positive,but the impact on non-state joint-stock Banks is negative,for state-owned Banks,disintermediation correction effect,the more obvious,the bank of robustness,the better,for the jointstock Banks,disintermediation correction effect,the more obvious,its robustness is the worse.The empirical results also show that the influence of some control variables on bank performance is also significant.The ratio of fixed assets has a negative impact on the performance of both state-owned Banks and joint-stock Banks.The higher the ratio of fixed assets is,the worse the bank liquidity will be.Relatively high cost income has a negative impact on the business performance of commercial Banks.The higher the cost income ratio is,the weaker the profitability of Banks will be.In terms of asset size,a large asset size will have a negative impact on the performance level of a bank.When a bank becomes larger,the negative impact on its operation will outweigh the positive benefits.The effect of equity ratio on bank performance is also reverse,and this conclusion applies to both state-owned Banks and joint-stock Banks.When equity ratio is high,that is,when financial leverage is low,the bank's robustness level is low.