BANKING AND BANKING REFORMS IN CHINA IN A MODEL OF COSTLY STATE VERIFICATION
构建宏观模型分析中国垄断性银行业与债券、私人贷款共存的内生机制，预测扩大信贷供给和取消利率上限对不同融资渠道的影响，并提供了实证支持。
Abstract 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.