Asset-Liability Structure And Risk-taking Of China’s Commercial Banks

The object of this paper is the typical characteristics of asset and liability structures of commercial banks in China under the effect of policy regulation,the effect and mechanism of policy on asset and liability structures,and the change of risk bearing under the change of asset liability structure of commercial bank.At present,China’s economic growth mode is undergoing profound changes,which is in an important strategic opportunity period from the traditional extensive high-speed growth to the high-quality growth in the new period.The driving force of economic growth has gradually changed from the original cost advantage of production factors and investment driven to innovation driven and industrial structure optimization and upgrading.With China’s economy entering the new normal,the financial industry is also deepening reform to adapt to the new development trend.On the one hand,while expanding the total assets,China’s financial industry has increasingly paid attention to and adopted financial innovation activities represented by various off balance sheet non-standard business and inter-bank business,focusing on the adjustment of the asset liability structure of major commercial banks.These measures make the operation of the financial industry more dynamic and better serve the real economy.Meanwhile,we also deeply realized that there are also different financial risks with the scale growth,tool innovation and business structure transformation.Therefore,general secretary Xi Jinping pointed out in the thirteenth collective learning of the Political Bureau of the CPC Central Committee in 2019 that we should not only resolve the existing financial risks,but also curb the spread of financial risks,especially avoid the occurrence of systemic financial risks.This is the foundation of doing well in the work of financial integration.As the main channel of social financing,the steady development of commercial banks has an important impact on China’s financial system and financial stability.Under the background of economic development entering the "new normal" and the deepening of financial development,the asset scale,asset side and liability side structures of commercial banks have undergone significant changes,which are reflected in a series of characteristics,such as the high proportion of non-standardized assets in the balance sheet,the significant fluctuation in the proportion of financial investment,and the decline of inter-bank liabilities.The main source of funds supporting the asset expansion of commercial banks has shifted from traditional deposits to inter-bank liabilities and central bank loans,while the expansion of asset side relies more on non-standardized assets and financial market investment.At the same time,the financial regulatory agencies have also changed a lot in monetary policy,regulatory content and supervision measures.In the past 20 years,the means of monetary and financial policy regulation in China has also experienced a transformation from the original single monetary policy tool and micro-financial supervision to the coordinated development of monetary policy,MPA and micro-financial supervision.The monetary policy framework has gradually explored the establishment of a"double pillar" financial regulatory framework by shifting from quantitative control to price-based regulation,coupled with the synergistic effect of macro prudential policies.In terms of financial supervision,except the traditional regulatory indicators such as deposit loan ratio,capital adequacy ratio and non-performing loan ratio,non-standardized assets on and off the balance sheet,financial products and inter-bank business are also added.The upgrading and transformation of these policies not only play a historical and important role in shaping the current business structure of banks,but also have a crucial impact on the future business decision-making and risk-taking of banks.With the change of the asset-liability structure of commercial banks under the policy regulation,the risks of commercial banks and the whole financial system have also changed.On the one hand,this change is related to the efficiency of resource allocation in the financial system and the transmission effect of various policies to the real economy.On the other hand,it also affects the stability of the whole financial system.Therefore,the changes of asset liability structure and risk bearing of commercial banks under the adjustment of financial policy transformation are worth in-depth analysis and exploration.Based on the asset-liability structure of commercial banks,this paper discusses and analyzes the impact of financial policies on the asset and liability structures of commercial banks and the impact of asset-liability structure of commercial banks on their risk-taking under the effect of policies.First of all,this paper systematically summarizes and combs the relevant theories of monetary policy,MPA,micro-financial regulatory policy and the asset and liability structures of commercial banks,and further analyzes the impact of the asset and liability structures of commercial banks on their risk-taking,as well as the research status of the impact of monetary policy and financial regulatory policy on the risk-taking of commercial banks through asset-liability structure.Secondly,combined with China’s characteristics and reality,this paper summarizes the typical characteristics and policy driving factors of asset-liability structure change of commercial banks in China,and clarifies the main aspects of asset liability-structure change of commercial banks and the driving effect of policy adjustment on them.Thirdly,based on the theoretical research and China’s practice,this paper makes a deep analysis on the mechanism of different financial policies’ differentiation,and preliminarily clarifies the influence direction of different policies on the asset-liability structure of commercial banks,and the impact of changes in asset-liability structure of commercial banks on their risk-taking under the effect of policies,which provides theoretical and practical basis for proposing research hypotheses.Fourthly,this paper empirically tests the impact direction and effect of different monetary policy instruments,MPA and micro-financial supervision on the asset and liability structures of commercial banks,and deeply compares the effect differences between different policies and the heterogeneity of different types of commercial banks’ response to policies.Fifthly,this paper further empirically tests the impact of the structure of asset-liability and the transmission of external financial policies on the risk-taking of commercial banks,and analyzes the transmission mechanism of macro policies affecting the risk-taking of commercial banks by acting on micro-indicators.Finally,the paper summarizes the conclusions of theoretical analysis and empirical research,and puts forward policy suggestions according to the research conclusions.The main conclusions are as follows:Firstly,monetary policy can significantly adjust the asset-liability behavior of commercial banks from the total amount and structure.First,quantitative,price and new monetary policies can have a significant impact on the growth of asset size of commercial banks by affecting the liquidity of the money market.However,the quantitative monetary policy has the lowest impact on the growth rate of total assets of commercial banks,which shows that the money supply mode of flood is difficult to control the flow of money.Second,both quantitative and price oriented monetary policies can increase the allocation of non-standard assets and financial investment assets.However,the proportion of non-standard assets is only sensitive to quantitative monetary policy,while the proportion of financial investment assets is only sensitive to price monetary policy.Loose monetary policy can increase the demand and supply of non-standard assets of commercial banks,and the allocation of financial investment assets depends more on the price changes in the interest rate market.Third,the loose monetary policy will lead to a decrease in the proportion of inter-bank liabilities,which is mainly due to the decline in the demand for liquidity supplement of commercial banks,the increase of liquidity supplement channels and the decrease of dependence on inter-bank liabilities under the condition of abundant market liquidity.Fourth,the sensitivity of non-state-owned banks to monetary policy adjustment is higher than that of state-owned banks in terms of the growth rate of total assets,the proportion of non-standard assets and the proportion of inter-bank liabilities.Secondly,MPA can significantly affect the scale and assets-liability structure of commercial banks,while the effect of micro-supervision lags behind.First,the macro prudential regulatory policies in different fields have a negative impact on the asset size of commercial banks.On the one hand,the regulatory policies on non-standard assets and off-balance sheet assets can improve the asset growth rate of commercial banks.By promoting the return of off-balance sheet assets and standardizing the allocation of risk assets,the bank’s operating performance can be optimized in the long term and the asset scale expansion can be promoted.On the other hand,the supervision of inter-bank liabilities also inhibits the growth of total assets.Second,the macro prudential supervision policy can effectively inhibit the allocation of non-standard assets and inter-bank liabilities of commercial banks from both asset side and liability side,and it has a certain continuity,but it has no significant impact on the allocation of self-financing assets.Third,macro prudential supervision policy can affect the scale and structure of assets and liabilities of commercial banks by influencing their business strategies.Fourth,the micro-regulatory policy has no significant impact on the scale of assets and liabilities of commercial banks in the current period.However,the micro-regulatory policy lagging behind the first and second periods has a significant inhibitory effect on the asset growth of commercial banks.Fifth,the micro-regulatory policy has no significant impact on the asset liability structure of commercial banks in the current period.However,the lag of one period will encourage commercial banks to allocate non-standard assets,which makes it difficult for micro-regulatory policies to optimize the asset liability behavior of commercial banks.Fifth,the micro-regulatory policy is difficult to form substantial constraints on the asset-liability allocation of state-owned banks,while the macro-prudential regulatory policy is effective for both state-owned and non-state-owned banks.Finally,the adjustment of the asset liability structure of commercial banks will have a significant impact on their risk-taking.At the same time,policy shocks can also affect their risk-taking by acting on the asset-liability structure of commercial banks.First,the growth rate of total assets scale of commercial banks has a significant negative effect on risk-taking.The higher the asset growth rate is,the stronger the ability of risk dilution and resistance is,and the lower the risk faced.Second,the proportion of non-standard assets has a significant positive effect on risk-taking,and the excessive expansion of non-standard assets will increase the credit risk faced by commercial banks.Third,the loose quantitative monetary policy can reduce the bank’s risk-taking by stimulating the expansion of bank’s total assets,but it can also increase the implied multiple risk-taking by increasing the bank’s non-standard asset allocation.The offset of the two mechanisms leads to the insignificant impact of quantitative monetary policy on bank’s risk-taking.Fourth,the tight price-type monetary policy can increase the bank’s risk by limiting the expansion of its asset scale.The increase of interest rate marketization has seriously squeezed the asset allocation scale of banks,while the decline of scale has greatly increased the overall risk faced by banks.At the same time,due to the tightening of liquidity,banks have to transfer part of their investment in low-risk assets to assets with higher risk return in order to maintain the original level of return,thus improving the level of risk-taking.Fifthly,the macro prudential supervision policy can reduce the risk-taking of commercial banks in the next period by affecting the total asset size and the proportion of non-standard assets.Sixth,the inhibitory effect of micro-regulatory policies on the current risk-taking of commercial banks still lags behind.The academic contributions of this paper are mainly reflected in the following aspects:Firstly,this paper brings monetary policy,MPA and micro-regulatory policy into the unified perspective of influencing the asset-liability structures of commercial banks,which makes a full discussion,empirical study and comparison of the effects of monetary policy,MPA and micro-regulatory policy.Meanwhile,it deeply excavates the differential impact of various policies on the asset side and liability side of commercial banks.It provides a practical reference for the subsequent formulation and implementation of various policies.At the same time,on the basis of clarifying the effect and direction of the policy,it provides a practical basis for further strengthening the coordination of monetary policy,MPA and financial supervision policy.Secondly,this paper deeply investigates the impact of the changes of the asset and liability structures on risk-taking of commercial banks under policy shocks.It combines the macro external factors of policy shocks with the internal factors of structural adjustment of commercial banks.Based on the changes of their own asset-liability structures and the changes of the asset and liability structures under policy shocks,this paper gives a more comprehensive consideration of the risk-taking of commercial banks.Furthermore,we analyze and empirically test the mechanism of macro policy through micro variables.This provides an important micro-basis for the theoretical study of macro-policy transmission.Thirdly,this paper finds and confirms the delay effect of micro-regulatory policy and the persistence of MPA.The formulation of micro-regulatory policies is usually based on the historical operating conditions of commercial banks,so it has a time lag effect.In contrast,MPA,aiming at systemic risk supervision and preventing financial risk diffusion among banks,can more directly and effectively affect the asset-liability structures of commercial banks and control their risk expansion.And the effect of such regulatory policies can usually maintain for a while.It is of practical significance to identify the differences in continuity,time lag and action mechanism of various policies,which can help the regulatory authorities to "suit the case",make more effective use of existing tools to force the optimization of banking business structure and prevent systemic financial risks.Fourthly,this paper systematically identifies the differences among different monetary policies,the impact of monetary policy transformation and the heterogeneous response of different types of commercial banks,and verifies that the overall effect of price based monetary policy is better than that of quantitative monetary policy.Monetary policy based on price adjustment means helps to play a decisive role in the allocation of monetary resources and can be realized more effectively.At the same time,the heterogeneous response of different commercial banks shows that the implementation of monetary policy needs to be more targeted and reflect business alienation.These conclusions provide strong theoretical and empirical support for the future adjustment of monetary policy.In terms of policy recommendations,it mainly includes the following aspects:Firstly,give full play to the decisive role of market mechanism in the allocation of money,an important resource,and further deepen the reform of interest rate marketization.Secondly,strengthen the coordination of monetary policy,macro Prudential policy and financial supervision policy.Thirdly,strengthen the penetrating supervision of commercial banks and improve the ability and level of supervision.Fourthly,it is necessary to further clarify the division of powers and responsibilities between the central and local financial supervision,and strengthen the financial supervision responsibility and risk disposal responsibility of local governments.Finally,it is necessary to strengthen the main responsibility of commercial banks in operation management and risk prevention,and promote the business transformation of commercial banks.