An Empirical On The Relationship Between Capital Adequacy Radio And Bank Efifciency On Chinese Commercial Banks

The regulatory history of the capital adequacy ratio of commercial banks has been onhow to balance the relationship between the capital adequacy ratio and bank efficiency, so thateven if the commercial banks achieve the capital adequacy regulatory requirements to ensurethe stability of their business, they can not limitations and impact of banking development andimprovement of efficiency. Hard indicators of capital constraints, Chinese commercialbanking industry how to speed up transformation and upgrading of the development model,and effective control of systemic risk worse, constantly improve the efficiency of banks, andreached the orderly and healthy development of bank stability operations and revenue growth,has become a bank regulatory authorities and commercial banks need to focus on a majorissue.Domestic and international capital adequacy ratios and bank efficiency literature on thebasis of reviewing the basic mechanism of the initial clearance of the capital adequacy ratio ofcommercial bank efficiency, use of relevant statistics to examine Chinese capital adequacyratio of commercial banks and bank efficiency the changes. On this basis, select the 14commercial banks 2003 - 2010 Annual Report data, the establishment of multiple linearregression model, using the SPSS software to an empirical test of the relationship betweenChinese commercial banks’ capital adequacy ratios and bank efficiency, combined with Chinacommercial banks operating status of the empirical results given in the preliminary economicsto explain. The empirical results show that: (1) the positive correlation between theprofitability of capital adequacy ratio of commercial banks, which indicates that theprofitability of Chinese commercial banks has been enhanced with the capital adequacy ratioimproved; (2) capital adequacy ratio of commercial negative correlation between banks’liquidity, which shows Chinese surge in bank lending, the commercial banks to improve loanratio at the same time also increased the risk-weighted assets, which caused a sharp decline incapital adequacy ratio; (3) capital adequacy ratio of commercial banks asset quality arenegatively related, indicating that rising non-performing loan ratio of commercial banks,banks for their own long-term stable development, it will choose to use the bank’s capital tooffset the number of non-performing loans, which will reduce its capital adequacy rate levels; (4) management capacity indicators are more significant impact on bank efficiency, whichshow the relative proportion of administrative expenses reduced to improve the profitabilityof banks.Based on the above empirical results and the operating status of Chinese commercialbanks should adopt the following measures to improve commercial banks’ capital adequacyratios and bank efficiency: First, increase the capital adequacy ratio; second，strengthen themanagement of non-performing loan ratio of commercial banks; it is reasonable to determinethe commercial banks capital mobility level; improve the level of commercial bankmanagement; looking for new profit growth point.