A study on the efficiency of credit allocation of the commercial banks

This paper puts forward more universal framework model-the interaction model of bank and corporation based oil the Hotelling model. With this model, this paper Studies the connection between project screening and efficiency, of credit allocation, and also the connection between market entry and market structure. From the study, the conclusion is drawn that no- restricted market entry can cause to compete extremely in the banks and give rise to too many bad loans, which will restrict the healthy development of bank, thereby, the government must build all effective mechanism of market entry, and make the market keep a proper amount banks to improve the efficiency of credit allocation and to make the sustainable development of them.