| Banking sector is the main part of China's financial system,and has a key position in the economic development. The change of capital regulation policy will affect the size of credit and the economic growth driven by investment directly. This paper aims to study the relationship between capital regulation,bank credit and economic growth. People's Bank of China first published its capital adequacy ratio standards in 1993,and included it in the scope of monitoring. In 2004,China Banking Regulatory Commission promulgated the Capital Adequacy Ratio Management Approach of Commercial Banks, which indicated that China has begun a formal sense of capital regulation。Because of the national policy and banking system,the capital regulation policy did not aim at its purpose before 2004,the banking sector accumulated large amounts of non-performing loans,along with this is the low capital adequacy ratio. The banking credit was not affected by this regulation policy,but subjected to the deposit growth rate. This situation changes a lot since the formal implementation of capital regulation policy. Since then on,the banks capital adequacy ratio has improved greatly,and the credit growth rate is gradually declined. The empirical result shows that long term elastic coefficient of bank credit to economic growth is 2.5390,deposit and money supply mainly affect the short term economic growth,the elastic coefficient is -0.1389 and 0.4351 respectively. Impulse response function analysis showed that the impact of bank credit to economic is less important at first,but with time going on,this effect will greatly enhanced,finally its stable level is about 4%; money supply has a positive role to economic growth in the short term. |
