Effect of digital currency on cash leakage
The digital RMB red envelope of 10 million yuan issued by Shenzhen city has brought the development of e-money back to the people's vision
in fact, since April 2020, small-scale pilot projects of digital RMB have been carried out in Shenzhen, Cheng, Suzhou and xiong'an, and the pilot scale will be expanded to 28 provinces and cities in August 2020
as a socially recognized "super outlet", in addition to the high investment of digital currency related enterprises, its impact on the financial market is also of great research value
Policy evolution of the development of digital RMBas early as 2014, the central bank has concted research layout on digital RMB, and discussed the development framework of digital RMB with major international financial institutions and research institutions in the 2016 digital currency seminar
after six years of development, China has initially developed the "pbctfp blockchain platform" and continuously promoted the pilot activities of digital RMB. It can be predicted that as today's technology and policy outlet, digital RMB will have excellent development prospects and extremely fast development speed in the next few years
Figure 1: Policy Evolution of digital RMB
with the improvement of China's national strength, digital RMB provides an opportunity to establish a "new system of RMB cross border settlement", which can promote RMB payment activities around the world and realize the internationalization of RMB
the "bee car" that I contacted recently is a value-added service operator of automobile insurance, which mainly solves the pain point of the "small scratch and small rub" application scenario of the car owners group, and helps to establish the connection and access path between the insurance channel and the car owners through the Internet blockchain and other technical means and the operation mode (maintenance fund) of mutual assistance of community members, Enhance the group of car owners and improve the anti risk ability
specifically, bee car provides a compliance and attractive maintenance project, which enlarges the handling charge of vehicle insurance to four times the cash value. For consumers, it is more cost-effective to insure, while for insurance companies, it can prevent disasters and rece losses, and rece the cost of compensation. In the event of an accident, the proct provided by the bee car can offset the maintenance expenses without insurance. Because it is not included in the accident record, the premium will not rise
in terms of the resources needed to do this, Yu Kairui, CEO of bee car, told 36 krypton that the company started to do "Yalai technology" of social economy in 2014, and set up the corresponding social platform in 2015, including bee club and bee car. Among them, bee Club covers more than 1000 large and medium-sized NGO community organizations, including more than 2 million middle-class users in Guangzhou and Shenzhen. This year, Yalai began to explore community financial services
on the qualification resources of mutual insurance mode, bee car has established a cooperative relationship with Zhonghui mutual insurance to obtain domestic property insurance mutual insurance license and internet mutual insurance qualification, and provide support for proct design, actuarial and risk control related to mutual insurance
in terms of insurance companies and brokerage agency resources, bee car has reached cooperation with Tencent Weibo (a vehicle insurance channel based on wechat) to provide it with value-added services of vehicle insurance. In addition, bee car has signed cooperation agreements with PICC and Pacific, and reached cooperation intention with Ping An, Zhonghua, Anxin and AXA balance. Other partners of bee car include dolphin Baobao, Zhitong engine, etc
in terms of business model, bee car charges service fees from insurance channels, which comes from the handling fees of insurance companies. Therefore, the insurance channels do not need to increase the budget. At present, bee car has verified its willingness and ability to pay on a small scale
Fengche will charge a service fee of 1% - 3% of the commercial vehicle insurance premium, and its premium can reach up to 600 million yuan / year. In the first stage, it can achieve profit and loss balance. In terms of the company's cost, the bee car team has about 20 people, and the expenses for comprehensive administrative travel, server and third-party technical cooperation are about 500000 yuan per month
ANGEL round entrepreneurial team invested by itself, and China Science Merchants Group & China Science lechuang invested in round a in 2016. At present, bee car plans to finance round a, with the amount of 20-40 million yuan.
as the basis of deposit expansion and money creation in the whole banking system, the amount of base money has a decisive impact on the total amount of money supply
A. base currency = legal reserve + excess reserve + cash on hand of the banking system + cash held by the public (cash leakage)
cash leakage is caused by the reserve of the banking system (including the sum of legal deposit reserve and excess reserve).
the cash leakage rate is also known as withdrawal rate or cash ratio, It means that the customer withdraws more or less cash from the bank, so that part of the cash flows out of the bank system, resulting in the so-called cash leakage. The ratio of cash leakage to total deposits is called cash leakage rate. Cash leakage will rece the ability of banks to create derivative deposits
A. base currency = deposits in the whole banking system
one to one correspondence
B. money supply = increase in demand deposits of commercial banks = increase in deposits outside the whole banking system
in figures
a.27 trillion base currency = deposits in the whole banking system -- & gt; 9.5% + 0.5% + 5%
one by one,
B. money supply = increase in demand deposits of commercial banks -- & gt; In theory, money supply is the proct of base money and money multiplier
base money, also known as strong money or high-energy money, refers to the sum of cash and banking system reserves (including statutory deposit reserves and excess reserves) held by the public in circulation. As the basis of deposit expansion and money creation in the whole banking system, the amount of base money has a decisive impact on the total amount of money supply
in terms of use, the base currency is the cash in circulation and the reserve of commercial banks. From the quantitative point of view, the base money is composed of four parts: legal reserve, excess reserve, cash on hand and public cash outside the banking system. The formula is as follows:
base currency = legal reserve + excess reserve + cash on hand of the banking system + cash held by the public
￥￥￥￥￥￥￥ knowledge points: money supply, base currency, cash leakage
1. Cash leakage is caused by the reserve of the banking system (including the sum of legal reserve and excess reserve),
the cash leakage rate is also known as the withdrawal rate or cash ratio, which means that customers withdraw more or less cash from the bank, so that part of the cash flows out of the banking system, resulting in the so-called cash leakage. The ratio of cash leakage to total deposits is called cash leakage rate. Cash leakage will rece the ability of banks to create derivative deposits
￥￥￥￥￥ money supply refers to the money stock of a country serving the social and economic operation at a certain point in time, which is composed of deposit money and cash money supplied by financial institutions including the central bank< First, the return of credit funds
China's banking system implements the first level legal person, and establishes branch banks according to administrative divisions. With the deepening of the reform of the financial system, driven by the principles of safety and efficiency of bank credit funds, the internal funds of the banking system transfer part of the deposit funds absorbed by the central and western regions to the eastern regions where the efficiency is better, the capital circulation operation and turnover speed are fast through the way of deposit and allocation with the internal funds of the branches. Although this mode of operation will be interfered by the local governments in the areas where the funds are transferred out, with the continuous implementation of the financial system since the 1980s, especially the credit system reform measures, banks have the right to extend the autonomy of credit funds, and the right to transfer and allocate the credit funds between the head office and the branches is increasing. Therefore, the scale of regional capital flow through bank intermediary credit is on the rise. In some provinces of Northwest China, e to the low efficiency of investment, the banking system has formed a huge deposit gap for a long time. At present, these situations not only have not improved, but also have a growing trend< Second, inter provincial direct investment is mainly from the central and western regions to Shanghai, Shenzhen and other eastern regions, which leads to the "eastward flow" of capital. Large scale investment in Shanghai by mainland enterprises is one of the important supporting factors for the rapid economic development in the Eighth Five Year Plan period. According to the statistics of more than 7000 foreign enterprises in Shanghai, in 2003, more than 13.4 billion yuan of taxes were paid, which was nearly 30% of the local fiscal revenue of Shanghai that year. Throughout the Eighth Five Year Plan period, investment in other provinces, autonomous regions and municipalities directly under the central government in Shanghai reached 60 billion yuan. By the end of 2003, there were 22600 domestic enterprises in Shanghai, of which the output value was 231.5 billion yuan and the profit was more than 7 billion yuan. At the end of 2003, the number of foreign enterprises in Shanghai increased to more than 31000, which is basically the same as the number of foreign-funded enterprises in Shanghai. Sichuan, Hubei, Jiangxi, Anhui, Jiangsu and Zhejiang have invested in more than 5300 enterprises in Shanghai. At present, more than half of the domestic enterprises in Shanghai come from the central and western regions. According to incomplete statistics, by the end of 2003, 30 provinces, autonomous regions, municipalities directly under the central government and relevant central ministries and commissions had set up more than 20000 enterprises in Shenzhen, with a total amount of speculation of more than 40 billion yuan. Moreover, the profits made by many mainland enterprises continued to develop in Shenzhen< In theory, money supply is the proct of base money and money multiplier
base money, also known as strong money or high-energy money, refers to the sum of cash and banking system reserves (including statutory deposit reserves and excess reserves) held by the public in circulation. As the basis of deposit expansion and money creation in the whole banking system, the amount of base money has a decisive impact on the total amount of money supply.
it is also closely related to Internet technology and has the attributes of payment and circulation. The central bank's "digital currency" is closely related to bitcoin. But bitcoin is a kind of digital currency, but digital currency is not just a form of bitcoin. Although the central bank's "digital currency" veil has not yet been lifted, there must be many differences with bitcoin
first of all, the issuers are different
most currencies have an issuer. For example, RMB is printed and issued by the central bank. But bitcoin does not have a centralized issuer. It is generated randomly based on an algorithm. Anyone can mine, buy, sell or receive bitcoin
secondly, the acquisition methods are different
bitcoin is the result of unremitting "mining" by some people who master the algorithm. These real it experts need to search for 64 bit numbers by computer, and then compete with other gold miners by repeatedly solving puzzles to provide the required numbers for the bitcoin network and obtain the corresponding bitcoin
but the digital currency issued by the state is bound to face the people of the whole country, rather than some network experts. When the country strives to achieve the goal of Inclusive Finance, how can it only tailor a currency for Internet experts? The national version of "digital currency" is bound to help the realization of Inclusive Finance, facing the most extensive groups
in addition, the pricing is different
in the face of bitcoin, which is becoming more and more difficult to "dig", many experts are more energetic like upgrading to fight monsters. With the increasing difficulty of "mining", the price of bitcoin has also soared and fluctuated greatly
a national currency has to try its best to maintain its own stability. Naturally, it is impossible to price according to the difficulty of acquisition, just like collectibles, because of scarcity
in addition, the application range is different
at present, all countries, including China, do not recognize the monetary attribute of bitcoin. Some organizations may have accepted donations from bitcoin, and some supermarkets have said that they can pay with bitcoin, but this is only within a very small range
as a digital currency issued by a country, it must be able to meet the largest range of payment needs, especially with the evolution of mobile Internet, cloud computing, blockchain and other technologies, and under the background of great changes in global payment methods, the central bank's digital currency needs to meet the global payment needs
if the central bank's "digital currency" is very different from bitcoin, how is it different from virtual currency
people who have used QQ should be familiar with QQ coins. They need to change their clothes for QQ avatars and change their backgrounds for QQ spaces. Many Tencent online games also need QQ coins to recharge. Like this, there are many virtual currencies based on the network, such as the online currency of the network company, the recharge voucher of the game company, etc
as far as the scope of application is concerned, most of these online currencies are used to recharge games, purchase equipment and props, and cannot be paid offline; As far as the exchange method is concerned, in principle, virtual currency can only be purchased with real currency, but it is not allowed to convert virtual currency into real currency; As far as issuance is concerned, it is launched by enterprises themselves, some of which are like "vouchers" rather than real currency
therefore, although the issuance of "digital currency" by the central bank inevitably requires payment transactions on the Internet, the principles and methods are different from those of virtual currency
especially at present, when many enterprises issue virtual currency, e to their own lack of risk prevention and control and security awareness, they leave an opportunity for some criminals to swipe bank cards, sell stolen goods and launder money. If the central bank's "digital currency" is issued, whether it will replace these online virtual currencies and make the online payment environment safer, healthier and more transparent is a question worthy of consideration.
1、 According to the quantity theory of original money, the demand for money in economy is directly proportional to the trade volume of goods, which can be expressed as Fisher's money trade equation: mv-pq
where m is the quantity of money, V is the speed of money circulation, P is the price of goods, q is the volume of goods transactions, and PQ proct is the volume of goods transactions in a certain period. It can be seen that the earliest definition of the velocity of money circulation is the average number of times a unit of money is used in a year, so it is also called the velocity of money transaction< From 1960s to 1970s, the monetarist school headed by Friedman developed the theory of money quantity. The new theory of money quantity has the following equation: MV = py, where py refers to nominal money income, With this change, the speed of money circulation also has a new meaning: the average number of unit money turnover (including the whole process of reproction) in a certain period of time. Therefore, it is also known as the velocity of money income circulation
it can be seen from the above model that the two are basically unified in principle, and the main difference between them is that the former originates from the function of money as a means of transaction to explain the speed of money circulation; The latter is explained by the function of money storage means (permanent income). According to the theory of money equilibrium, the condition of money market equilibrium is Ms = MD, so the velocity of money circulation V has a direct relationship with the amount of money supply. As we all know, M2 is composed of M1 and quasi money (M2 & # 8722; M1 corresponds to the transaction function of currency, and quasi currency corresponds to the storage function of currency. By combining the two, we can get the general formula of money circulation speed as follows:
m2v = GDP (1)
2. The influence of financial innovation on money circulation speed
1. The influence of financial innovation on the definition and division of money
from the perspective of the whole development of money, it is generally believed that money has gone through the stage of simple commodity money, precious metal money, precious metal money and so on There are four stages: symbolic currency stage and electronic currency stage. In terms of its value as currency and the value it contains, each stage has many forms, such as physical currency, metal currency, credit currency, electronic currency, digital currency, etc. (among them, digital cash is the higher stage form of the development of electronic currency). The rapid development of financial innovation makes the definition of currency increasingly difficult. What is money? According to the traditional definition of money, money is a special commodity which is generally accepted by the public as a general equivalent. Marx and some contemporary mainstream economists think that "money is a kind of social relationship"; However, Milton Friedman and mankun, a young professor of Harvard University and a new Keynesian economist, said that "money is a group of assets that people often use to buy other people's goods and services in the economy."; Simmel, a sociologist, regards money as "the common denominator of all values" and "the cashing of values": "money is the materialization of exchange activities between people, and it is the embodiment of a pure function." Economists and sociologists have been puzzled for a long time on the issue of understanding and grasping what money is, especially financial innovation makes the extension of money more and more extensive, so the definition of money is more and more complex
after the financial innovation, especially the innovation of a large number of financial business, many new accounts have emerged. The emergence of these accounts makes the traditional division of money supply levels confused. For example, new accounts such as now, ATS and mmda all have the function of issuing cheques, which are similar to current deposits and should be transferred to M1, but most of the balance of these accounts is placed in investment savings accounts, In fact, it should belong to m2. Due to the similar financial innovation, countries have constantly revised the division of money supply levels. The United Kingdom has eight money supply indicators, such as M1, M2, m3, DCE, PSL1 and PSL2. From 1970 to 1984, the definition of money was revised nine times. During 1971-1984, the United States revised the definition of money seven times, and the money supply index has developed to M1, M2, m3, l and debt. Despite frequent modifications, the problems brought about by financial innovation have not been completely solved, such as electronic accounts, multi-functional credit cards and online payment accounts, and so on. Therefore, financial innovation makes it more difficult to define the definition and level division of money, which directly affects the analysis and measurement of money circulation speed
2. The relationship between money circulation speed and money multiplier
money multiplier refers to the credit expansion multiple generated by the money supply derived from the deposit creation function of commercial banks on the basis of base money (high-energy money). Under a certain nominal GDP, there is an inverse relationship between money multiplier B and money circulation speed v. that is to say, under a certain output level, when money circulation speed increases, money multiplier decreases; vice versa. Therefore, to analyze the impact of financial innovation on the speed of money circulation, as long as we find out the factors that affect the money multiplier, we can draw the corresponding conclusions
3. From the perspective of the modified money multiplier, the impact of financial innovation on the speed of money circulation
financial innovation has had a profound impact on the definition of money and the division of money levels. With the increasing variety of financial instruments, great changes have taken place in the supply of money with different liquidity, such as cash in circulation and various deposits. The influence of financial innovation on various factors of monetary multiplier is as follows< With the development of electronic technology, the development of electronic money will become the mainstream of money. Lending, consumption and transfer between economies will all be settled through the Internet, and check and cash settlement will graally decrease. In particular, digital cash is an advanced form of e-money developed on the basis of the graal deepening of bank deposit transfer payment instruments and the graal crowding out of cash currency. It is the proct of the continuous development and evolution of various types of e-money, such as physical money, precious metal money, substitute symbol money (paper money) and so on With a series of advantages such as unlimited segmentation, real value, convenience and exchangeability, it can be inferred that the influence of digital cash on the evolution of currency form will make digital cash occupy some forms of cash currency, paper currency and deposit currency, and graally become one of the most important currency forms in the future digital currency era, It is the best substitute for cash, paper currency and deposit currency. Therefore, since its inception, it has rapidly occupied the position of various forms of e-money in the early development of digital cash in cash and deposit currency, and has come from behind. It is not difficult to infer that with the increase of the contribution rate of the digital economy to the overall economic growth, the demand of the real economy for the current cash and paper currency will be greatly reced to a small amount e to the graal crowding out of the digital cash, the digital cash will be widely popular, and most of the settlement temporary deposit currency will be graally transformed into the form of digital cash, A small number of them will still exist in the form of card type electronic currency and deposit transfer type electronic currency, but they will graally transform into digital cash
2) the impact of financial innovation on monetary level and monetary multiplier
financial innovation makes the traditional division of monetary level more and more vague, the transaction cost of various currencies is lower and lower, and there are more and more monetary levels, such as now account, ATS account, etc. Especially in the financial markets of western countries, e to the continuous innovation of financial procts and the increasing number of financial procts, financial innovative procts with different liquidity act as the medium of commodity exchange to varying degrees. It became de facto money. In this way, the scale of money supply is constantly expanding. Here, we can introce a quantity of replaceable financial assets that can act as a monetary medium under the financial innovation, that is, adding a quantity MC to the money supply, so the money supply under the financial innovation is:
m = C + Dr + DT + CE + MC (4)
the influence of financial innovation on the currency circulation speed can be explained from different aspects, including the rection of cash leakage rate, the decrease of cash flow rate, the increase of cash flow rate and the decrease of cash flow rate The increase of the proportion of alternative financial assets and the decrease of the excess reserve ratio will rece the speed of currency circulation, while the proportion of digital cash in current deposits will accelerate the speed of currency circulation. Generally speaking, e to the strong liquidity of digital cash and demand deposits, it is unlikely to proce a greater mutual substitution in a certain period of time (but CE will increase in the long run). Therefore, we should investigate the currency circulation speed or currency multiplier change in a certain period of time. The general trend is that financial innovation makes the currency multiplier increase and the circulation speed decrease
Third, the empirical test of China's money circulation speed and money multiplier changes
China's financial innovation started late, so the level of financial innovation is still at a low level compared with western countries. But in recent years, with the acceleration of China's financial system reform, financial innovation has also achieved phased development. In particular, the technological innovation brought by the application of electronic technology and the institutional innovation in the financial system reform have made great achievements. At present, financial procts are more abundant, and the pace of financial market-oriented reform is faster and faster. These measures will undoubtedly have a certain impact on China's currency circulation speed. The following uses the relevant data of China's money circulation speed and money multiplier from the 1990s to 2005 to make an empirical test on the above theories. The change trend of money circulation speed and money multiplier is shown in the figure. From the test data, in recent years, there is a reverse relationship between the velocity of money circulation and money multiplier in China, which is basically consistent with the theoretical relationship; At the same time, the test results basically meet the development trend of financial innovation, especially in recent years, the pace of financial innovation has accelerated, the speed of money circulation and the change of money multiplier has accelerated
1. The significance of financial innovation to the definition and division of money
from the perspective of the whole development of money, it is generally believed that money has gone through four stages: simple commodity currency stage, precious metal currency stage, substitute symbol currency stage and electronic currency stage
in terms of its value as money and the value it contains, each stage has many forms, such as physical money, metal money, credit money, electronic money, digital money, etc. (among them, digital cash is the higher stage form of the development of electronic money)
The rapid development of financial innovation makes the definition of currency increasingly difficult. What is money? According to the traditional definition of money, money is a special commodity which is generally accepted by the public as a general equivalent Both Marx and some contemporary mainstream economists believe that "money is a kind of social relationship"; However, Milton Friedman and mankun, a young professor of Harvard University and a new Keynesian economist, said that "money is a group of assets that people often use to buy other people's goods and services in the economy." However, Simmel, a sociologist, regards money as "the common denominator of all values" and "the cashing of values": "money is the materialization of exchange activities between people, which is the embodiment of a pure function."economists and sociologists have been puzzled for a long time on the issue of understanding and grasping what money is, especially financial innovation makes the extension of money more and more extensive, so the definition of money is more and more complex
after financial innovation, especially a large number of financial business innovation, many new accounts have emerged, which make the traditional money supply hierarchy confused. For example, new accounts such as now, ATS and mmda all have the function of issuing cheques, which are similar to current deposits and should be included in M1, but most of the balance of these accounts is placed in investment savings accounts, In fact, it should belong to m2
e to the similar financial innovation, countries have constantly revised the division of money supply levels. The United Kingdom has eight money supply indicators, such as M1, M2, m3, DCE, PSL1 and PSL2. From 1970 to 1984, the definition of money was revised nine times
During 1971-1984, the U.S. revised the definition of money seven times, and the money supply index developed to the current M1, M2, m3, l and debt. Despite frequent modifications, the problems brought about by financial innovation have not been completely solved, such as electronic accounts, multi-functional credit cards and online payment accounts, and so on Therefore, financial innovation makes it more difficult to define the definition and level division of money, which directly affects the analysis and measurement of money circulation speed2. The relationship between the speed of money circulation and the money multiplier is the credit expansion multiple of money supply derived from the function of commercial banks to create deposit money on the basis of base money (high-energy money)
under a certain nominal GDP, there is an inverse relationship between money multiplier B and money circulation speed V, that is, under a certain output level, when money circulation speed increases, money multiplier decreases; vice versa. Therefore, to analyze the impact of financial innovation on the speed of money circulation, as long as we find out the factors that affect the money multiplier, we can draw the corresponding conclusions
Financial innovation has a profound impact on the definition of money and the division of monetary levels. With the increasing variety of financial instruments, great changes have taken place in the money supply with different liquidity, such as cash in circulation and various deposits. The influence of financial innovation on various factors of monetary multiplier is as follows With the development of electronic technology, the development of electronic money will become the mainstream of money. Lending, consumption and transfer between economies will all be settled through the Internet, and check and cash settlement will graally decrease In particular, digital cash is an advanced development form of e-money developed on the basis of the graal deepening of bank deposit transfer payment instruments and the graal crowding out of cash currency. It is the proct of the continuous development and evolution of e-money in various development stages, such as physical money, precious metal money, and substitute symbolic money (paper money),has a series of advantages, such as good anonymity, unlimited segmentation, real value, convenience and exchangeability. It can be inferred that the influence of digital cash on the evolution of currency form will make digital cash continue to occupy some forms of cash currency, paper currency and deposit currency, and graally become one of the most important currency forms in the future digital currency era,
it is the best substitute for cash, paper currency and deposit currency. Therefore, since its inception, it has rapidly occupied the position of various forms of e-money in the early development of digital cash in cash and deposit currency, and has come from behind
It is not difficult to infer that with the increase of the contribution rate of the digital economy to the overall economic growth, the demand of the real economy for the current cash and paper currency will be greatly reced to a small amount e to the graal crowding out of the digital cash, and the digital cash will be widely popular.
and most of the settlement temporary deposit currency will be graally transformed into the form of digital cash, A small number of them will still exist in the form of card type electronic currency and deposit transfer type electronic currency, but they will graally transform into digital cash
2) the impact of financial innovation on the monetary level and monetary multiplier
especially in the financial markets of western countries, e to the continuous innovation of financial procts, the number of financial procts is increasing, and the financial innovative procts with different liquidity act as the medium of commodity exchange to varying degrees. It became de facto money
In this way, the scale of money supply is constantly expanding. Here we can introce a quantity of replaceable financial assets that can act as a monetary medium under the financial innovation, that is, adding a quantity MC to the money supply, so the money supply under the financial innovation is:m = C + Dr + DT + CE + MC (4)
the influence of financial innovation on the speed of money circulation can be explained from different aspects, among which the decrease of the rate of cash leakage, the decrease of the rate of cash flow, the decrease of the rate of cash flow, the increase of the rate of cash flow, the decrease of the rate of cash flow, the decrease of the rate of cash flow, the increase of the rate of cash The increase of the proportion of alternative financial assets and the decrease of the excess reserve ratio will rece the speed of currency circulation, while the proportion of digital cash in current deposits will accelerate the speed of currency circulation
generally speaking, e to the strong liquidity of digital cash and current deposits, it is unlikely that they will replace each other in a certain period of time (but CE will increase in the long run). Therefore, it is necessary to investigate the change of money circulation speed or money multiplier in a certain period of time. The general trend is that financial innovation makes money multiplier increase, The circulation speed decreased
extended data:
although the definition of financial innovation mostly comes from Schumpeter's concept of economic innovation, the connotation of each definition is quite different. To sum up, there are three levels of understanding of financial innovation
Macro level financial innovation equates financial innovation with major historical changes in the history of finance, and holds that the development history of the whole financial instry is a history of continuous innovation, and every major development of the financial instry is inseparable from financial innovationfrom this perspective, financial innovation has the following characteristics: the time span of financial innovation is long, the development history of monetary credit is regarded as the history of financial innovation, and every major breakthrough in the history of financial development is regarded as financial innovation; Financial innovation involves a wide range, including not only the innovation of financial technology, but also the innovation of financial market
financial services, proct innovation, financial enterprise organization and management innovation, financial service instry structure innovation, but also includes the modern banking instry since the emergence of banking business, bank payment and clearing system, bank asset liability management and financial institutions, financial market, financial system, international monetary system and other aspects of the previous changes
2, meso level
meso level financial innovation refers to the changes in the intermediary function of financial institutions, especially banks, since the late 1950s and early 1960s. It can be divided into technological innovation, proct innovation and institutional innovation. Technological innovation refers to the manufacturing of new procts. The process of adopting new proction factors or recombining factors, proction methods and management systems
proct innovation refers to the process that the supplier proces new procts with better performance and quality than traditional procts. Institutional innovation means that the formation and function of a system have changed. The process of improving the efficiency of the system
from this perspective, financial innovation can be defined as the graal change of financial intermediary function by the government or financial authorities and financial institutions in order to adapt to the change of economic environment and the internal contradictory movement in the financial process, prevent or transfer operational risks and rece costs, and better achieve the goals of liquidity, security and profitability, The process of creating and combining a new and efficient capital operation mode or operation system
The concept of financial innovation at the meso level not only limits the research time after the 1960s, but also has a clear connotation of the research object. Therefore, most of the researches on financial innovation theory adopt this concept
3. Micro level financial innovation only refers to the innovation of financial instruments. It can be roughly divided into four types: credit innovation type, such as using short-term credit to achieve medium-term credit
As well as the convenience of issuing bills to disperse investors to bear the loan risk exclusively; The innovation of risk transfer includes all kinds of new instruments, such as currency swap and interest rate swap, which can transfer the inherent risks of financial instruments among economic institutions It includes new financial instruments that can improve the liquidity and convertibility of the original financial instruments, such as the securitization of long-term loans, etc.; it includes various new financial instruments that can change creditor's rights into equity, such as bonds with equity subscription