Research On The Impact Of Financial Revolution On Financial Efficiency

From the plains of Mesopotamia to the British Isles to the mouth of the Hudson River,from the ancient city of Athens to Lombardy Street to Wall Street,finance has always played an important role in the development of human civilization.The most important effectiveness of finance for the development of real economy is to play the role of resource allocation.This paper analyzes the development of the financial revolution and its impact on financial efficiency by selecting revolutionary events from the birth of finance all the way to the development of modern finance,including the fiscal and financial reforms in the Netherlands,the establishment of the central bank system in England,the development of the U.S.stock market,and so on.The main findings of this paper are: First,the development of finance is not linear and requires sufficient socio-political and economic conditions in all aspects to facilitate and support the development of the financial revolution.The process of providing financial support to the industrial revolution also enhances financial efficiency,so the financial revolution and the development of the industrial revolution have a mutually reinforcing effect.Second,the development of the financial revolution and the enhancement of financial efficiency require the establishment and growth of the credit system.The operation of finance requires basic financial instruments.All kinds of financial instruments are essentially contracts that promise to be fulfilled at a certain point in the future,which essentially requires the participants to have the ability and willingness to fulfill the contract.Therefore,the widespread use of financial instruments requires a sound social credit system.Third,the financial revolution will bring new risks,and financial development must serve the real economy and must aim to improve financial efficiency.The process of financial development and change brings the benefits of increased financial efficiency and the risk of uncertainty accumulation.And,if the financial system fails to maintain support for the real economy,financial efficiency will begin to decline and financial effectiveness will be greatly reduced.Meanwhile,this paper measures financial efficiency using the annual industry data of the United States from 1949 to 2021 and the related data of the financial market as an example,and constructs a VAR model using capital market-related indicators.It is found that in the U.S.example,there is a more significant interaction between credit market and financial efficiency.The study summarizes the impact of the continuous development and change of finance,especially on the efficiency of the financial system itself,which has certain implications for the future direction of the development of financial technology and the prevention and response to financial risks.At the same time,in the context of the new round of industrial revolution,it has implications for how China can grasp the historical opportunity to promote the effective development of the financial industry and enhance the financial efficiency of China.