All Title Author
Keywords Abstract


Shadow Banking, Interest Rate Marketization and Bank Risk-Taking: An Empirical Study of the 40 Commercial Banks in China

DOI: 10.4236/jfrm.2017.61003, PP. 27-36

Keywords: Shadow Banking, Interest Rate Marketization, Risk-Taking, Industrial Diversification

Full-Text   Cite this paper   Add to My Lib

Abstract:

Based on the panel data of 40 Commercial Banks in China during 2006-2014, this paper makes an empirical study on the relationship between shadow banking, interest rate marketization and bank risk-taking by using the system GMM model. The study found that the development of the shadow banking and the interest rate marketization is conducive to the diversification of banks’ business, thereby reducing the risk of banks. The study also found that “too big to fail” and periodic are the characteristics of commercial bank risk.

References

[1]  Angkinand, A. P., Sawangngoenyuang, W., & Wihlborg, C. (2010). Financial Liberalization and Banking Crises: A Cross-Country Analysis. International Review of Finance, 10, 263-292.
https://doi.org/10.1111/j.1468-2443.2010.01114.x
[2]  Borio, C., & Zhu, H. (2008). Capital Regulation, Risk-Taking and Monetary Policy: A Missing Link in the Transmission Mechanism? BIS Working Papers, 8, 236-251.
[3]  Dai, G. Q., & Fang P. F. (2014). The Liberalization of Interest Rate and the Risks of Bank: A Study from the Perspective of Shadow Banking and Internet Finance. Finance Forum, 8, 13-19.
[4]  Delis, M. D., & Kouretas, G. P. (2010). Interest Rates and Bank Risk-Taking. Mpra Paper, 35, 840-855.
[5]  Demirgüc-Kunt, A., & Detragiache, E. (1998). Financial Liberalization and Financial Fragility. Social Science Electronic Publishing, 98, 4259-4299.
[6]  Ding, N. (2015). Analysis of the Impact of Shadow Banking Scale on the Profitability of Chinese Commercial Banks in the Process of Interest Rate Marketization. Macroeconomics, 7, 26-35.
[7]  Gennaioli, N., Shleifer, A., & Vishny, R. (2010). Neglected Risks, Financial Innovation, and Financial Fragility. Journal of Financial Economics, 104, 452-468.
https://doi.org/10.1016/j.jfineco.2011.05.005
[8]  Gorton, G. B., & Souleles, N. S. (2007). Special Purpose Vehicles and Securitization. SSRN Electronic Journal, 5, 21.
https://doi.org/10.7208/chicago/9780226092980.003.0013
[9]  Gorton, G., Metrick, A., Shleifer, A., & Tarullo, D. K. (2010). Regulating the Shadow Banking System. Social Science Electronic Publishing, 41, 261-312.
[10]  He G. S., & Chen F. (2015). The Empirical Analysis of Shadow Banking Business’ Influence on the Commercial Banks’ Profitability: Based on the Panel Data. Journal of Liaoning University: Philosophy and Social Sciences, 43, 55-61.
[11]  He, D. X., & Zheng L. S. (2009). The Shadow Banking System and Its Impacts on Financial Stability. Economic Management Journal, 11, 20-25.
[12]  Iori, G., Jafarey, S., & Padilla, F. G. (2006). Systemic Risk on the Interbank Market. Journal of Economic Behavior & Organization, 61, 525-542.
https://doi.org/10.1016/j.jebo.2004.07.018
[13]  Mao, Z. S., & Wan, Y. L. (2012). Study on China’s Shadow Banking System and Threshold Effect Banking System Stability in China. Studies of International Finance, 11, 65-73.
[14]  Minton, B., Sanders, A., & Strahan, P. E. (2004). Securitization by Banks and Finance Companies: Efficient Financial Contracting or Regulatory Arbitrage? Working Paper.
[15]  Peng, X., Li B., & Huang Z. G. (2014). Will the Interest Rate liberalization of Deposit Increase the Risk Level of Chinese City Commercial Banks?: A GMM Study Based on Data of 24 Chinese City Commercial Banks. Finance & Economics, 12, 1-10.
[16]  Porter, N. J., Feyzioglu, T., & Takáts, E. (2015). Interest Rate Liberalization in China. Social Science Electronic Publishing, 58, 1-28.
[17]  Pozsar, Z., Adrian, T., Ashcraft, A. B., & Boesky, H. (2013). Shadow Banking. Federal Reserve Bank of New York Economic Policy Review, 19, 447-457.
[18]  Zhang, J. H., & Wang, P. (2012). Bank Risk Taking, Bank Loans, and Legal Protection. Economic Research Journal, 5, 18-30.
[19]  Zhang, Z. Y., Wu, H. Y., & Wu, J. (2012). The Relationship between Price Competition of Commercial Banks and Risk Behavior: An Empirical Study Based on the Marketization of Loan Interest. Financial Research, 7, 1-14.
[20]  Zhu, J. G., Hu S. Y., & Lu Z. F. (2016). The Causes and Economic Consequences of Commercial Banks’ Engagement in Shadow Banking: From the Perspective of Outflow of Capital in Shadow Banking. Journal of Financial Research, 1, 66-82.
[21]  Zuo, Z., Tang X. G., & Liu, Y. Z. (2014). Will the Deposit Interest Rate Marketization Increase Bank’ Risk Level?: Based on an Angle of Narrowed Gap between Deposit and Loan Interest Rate. Finance & Economics, 2, 20-29.

Full-Text

comments powered by Disqus