Digital Finance,Bank Competition and Liquidity Creation
The rapid development of digital finance has profoundly influenced the traditional banking sector,particularly in the realm of liquidity creation.This paper conducts an empirical analysis,utilizing data from 200 Chinese banks from 2011 to 2020.The study uncovers several critical insights that shed light on the evolving dynamics between digital finance and bank liquidity creation.Firstly,the findings reveal that the competitive landscape of digital finance adversely impacts the quality of bank liabili-ties.This deterioration in liability quality,in turn,suppresses the banks'ability to create liquidity through the synergistic inter-action between deposits and loans.Moreover,the structural pressures exerted by digital finance compel banks to redirect their focus from traditional deposit and loan services to interbank and off-balance sheet activities.This strategic shift exacerbates the differentiation in liquidity creation among banks,presenting new challenges for traditional banking models.Secondly,the analysis explores the implications of digital finance on bank business models.It highlights a"crowding-out effect"where the expansion of digital finance inhibits the growth of physical bank branches.Conversely,the"innovation ef-fect"of digital finance fosters the development of mobile banking platforms,driving a transformative shift in how banks operate and engage with their customers.Thirdly,the study emphasizes the importance of innovation quality in determining the effectiveness of the"innovation ef-fect".Banks that exhibit a higher breadth of innovations and a faster pace of technological upgrade are better positioned to le-verage the benefits of digital finance in enhancing their liquidity creation capabilities.In the long-term,high-quality innova-tion serves as a critical counterbalance to the disruptive shocks of digital finance,underscoring the strategic importance of con-tinuous investment in technological advancements and innovative practices.In conclusion,the paper highlights the complex interplay between digital finance and bank liquidity creation,underscor-ing the need for banks to navigate the challenges and opportunities presented by the digital revolution.By embracing innovation and adapting their business models,banks can enhance their resilience and continue to play a vital role in the financial ecosys-tem.
Digital FinanceLiquidity CreationBank Business ModelCrowding-Out EffectInnovation Effect
NETL
NSTL
万方数据
