The Theory And Empirical Research On Influence Factors Of Commercial Bank Liquidity Creation

Bank liquidity creation is one of the basic responsibilities of the banks, which can create liquidity for the community to meet the social and economic development needs. The bank liquidity creation will be due to a series of internal and external factors - including the commercial bank itself and the impact of monetary policy changes, thus changing the cost of financing the real economy enterprises, affecting the real economy and the pattern.The fact that bank liquidity creation has a huge impact on the real economy prompt the central bank to adjust monetary policies appropriately, and strive to against the negative impact by liquidity creation. Monetary policy is generally divided into loose monetary policy and tight monetary policy. The loose monetary policy is generally to increase the money supply, such as the purchase of bonds on the open market, reducing lending and deposit interest rates, hoping to promote economic development, resistance to recession, and promote the employment effects. The tight monetary policy aims at curbing inflation and preventing economic overheating. The general measures to improve all aspects of interest rates. The loose or tight monetary policy by the central bank can impact on banks' balance sheets from different perspective, thus changing the bank's liquidity creation, offsetting its negative effects, and achieve the schedule policy effects.In this paper, we make the main factors which affecting the amount of the liquidity creation as the main object study, according to the measurement model to measure the amount of China's commercial banks'liquidity creation in recent years. First introduce its own factors to study how the size of commercial banks and the own equity capital and other factors impacting on liquidity creation. Then introduce the monetary policy factor to study the effects monetary policy on liquidity creation, and then make appropriate policy recommendations.Using the Berger and Bowman (2008) measurement model, selecting the "cat fat" method which including the off balance-sheet businesses to calculate the liquidity creation amount in the period of 2007-2010. This is because China's commercial banks which listed before 2007 is less, selecting the half-year data in a same year is difficult.This paper is described as follows:This first chapter is the research's background, topics, some related article references, and the research ideas and structure.The second chapter is a theoretical overview. Describes some basic concepts of the liquidity creation, including the definition and mechanism of liquidity creation, and in accordance with the specific situation of Chinese banks to choose the measurement model of bank liquidity creation, giving weight to all kinds of the business of China's commercial banks, and finally describes the impact of commercial banks to create liquidity factors, to prepare for the following studies.Chapter three describes how the size of the banks themselves and the number of its equity capital affect the liquidity creation. The 14 banks which listed around 2007 will be divided by the total assets at the end of 2010. Firstly, we will examine the volume liquidity creation on the sample period, compare the liquidity creation and the proportion of the total growth rate of different bank size. Then make each bank's equity capital as independent variables, the amount of bank liquidity creation as the dependent variable to regression analysis, examining the effect that banks' equity capital on bank liquidity created.ChapterⅣwill from the central bank perspective to examine the effect monetary policy of China's commercial banks on liquidity creation. Study the relationship between monetary policy and the amount of bank liquidity creation, balance sheet liquidity creation, and off-balance sheet liquidity creation of all sizes. Make the monetary policy as independent variables, the amount of bank liquidity creation, balance sheet liquidity creation, and off-balance sheet liquidity creation of all sizes as the dependent variable to regression analysis, examining the effect that central bank's monetary policy on the commercial banks liquidity creation.ChapterⅤis a summary of the research done by the article...