BANKING AND BANKING REFORMS IN CHINA IN A MODEL OF COSTLY STATE VERIFICATION

• 成果类型: Article
• 署名作者: Luo, Jie; Wang, Cheng
• 署名单位: University of International Business & Economics; Fudan University
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12744
• 发表日期: 2025
• 页码: 849-882
• 关键词: Financial intermediation; informal finance; monetary-policy; shadow banking; OWNERSHIP; CONTRACTS; GROWTH; debt

摘要

We present a macro view of China's financial system where a monopolistic banking sector coexists endogenously with bonds and private loans. In equilibrium smaller firms raise finance from private lending, larger firms through bank loans, and the largest by issuing bonds. The model predicts that expanding credit supply increases bank loans but reduces bond finance and private lending, in absolute terms and relative to total credit. In addition, removing the interest rate ceiling on bank lending-a recent reform in China-induces larger loans and higher lending rates, lowering the share of bank loans in total credit. Empirical evidence is presented to support these predictions.