Media Reports, Investor Sentiment And Bank Systemic Risk

In recent decades, with the growing popularity wave of information technology and the Internet, the rise of media power has become an important social phenomenon, media coverage impact on social and economic life is also growing. More and more facts show that the media reports on financial markets increasingly widespread, content gradually deepening, form tends to diversity, it may also play a role of public about existing information, exposer about corporate scandals, forecasters of financial market changes, investigative journalism of major events, as well as a point of view of hype by other identities. Thus, the media reported on the various roles of financial markets caused widespread concern in academic circles. Referring to the existing relevant research at home and abroad, more is to study media reports from the view of asset pricing and corporate governance, but for the media coverage impact on banking systemic risk in the economy, especially in the transition process in China rarely discussion.This article intends to sort out the basis of relevant literature, using 14 listed banks’ quarterly panel data during the periods of 2007-2015.Firstly, this paper uses deposits rate of change, loans rate of change, bankers confidence index, the banking climate index and the CCI to build a new bank investor sentiment indicator with principal component analysis, it offers a new perspective to measure banking investor sentiment and makes it more realistic. Then combining with static panel model and dynamic panel model, mainly through differential and system GMM estimation methods, this paper analyses the relationships among media report, investor sentiment and banking systemic risk. The results show that:The banking system risk has significant media effects, media reports will negatively infect investor sentiment, investor sentiment plays the role of adding fuel to the flames on the banking system risk. Early banking systemic risk is greater, the current that is also greater; investor sentiment in the early stage, the current investor sentiment also showed a high state.The conclusion of this paper shows that government and related department of banks should establish and improve the system of monitoring media, control risk contingency normal mechanism; also, it should establish cooperation with the media, with special attention to control the media coverage of negative bank news. Finally, banks need to take measures to reasonably monitor investor sentiment, in order to reduce banking systemic risk effectively.