Analysis on the Influence of Inflation on Financial Markets and Institutions in China

DOI

10.2991/assehr.k.211209.233How to use a DOI?

Keywords

Inflation; financial market; financial institution; stock market; commercial bank

Abstract

Impacts of inflation on financial markets and institutions in China will be discussed in this article, focusing on the stock markets and commercial banks. Since many scholars have studied how financial development affects inflation, the author chose to carry out reverse research. After comparing the average annual CPI and Shanghai Composite Index from 2000 to 2020, the author found that the annual earnings of the stock market will increase in lockstep with a rise in inflation which is relatively low and stable. After inflation goes too high, exceeding a certain value, will be detrimental to the stock market. When studying inflation’s effects on commercial banks, theoretical analysis was used. The disequilibrium between demand and supply of credit funds will be brought by inflation, and both revenue and costs of raising funds in commercial banks will decrease. Also, liquidity risk will be caused by the mismatch of deposits and loans maturity. In the end, several suggestions will be given to the public and commercial banks.

Copyright

© 2021 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article under the CC BY-NC license.

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TY  - CONF
AU  - Xin Tang
PY  - 2021
DA  - 2021/12/15
TI  - Analysis on the Influence of Inflation on Financial Markets and Institutions in China
BT  - Proceedings of the 2021 3rd International Conference on Economic Management and Cultural Industry (ICEMCI 2021)
PB  - Atlantis Press
SP  - 1434
EP  - 1437
SN  - 2352-5428
UR  - https://doi.org/10.2991/assehr.k.211209.233
DO  - 10.2991/assehr.k.211209.233
ID  - Tang2021
ER  -