An Empirical Research About Stability Of Commercial Banks

Commercial bank stability has been a theoretical and practical circles focus of attention, especially in the international financial crisis, a large number of bank failures so again the question of the stability of banks into people’s vision, causing scholars and practitioners who study and thinking this problem, but also point out the direction for regulatory reform and making policy. Although China has not experienced widespread bank failures, but this does not mean that the stability of China’s commercial banks higher or stronger than the foreign commercial banks, but because the government credit in which play an important role. So this paper focuses on banking supervision and market discipline from two aspects, analyzes government regulation and market forces influence the behavior of commercial banks, which not only conforms to the direction of theoretical research, but also has important practical significance to enhance the stability of our commercial banks.Defined on the basis of stability, select our16listed commercial banks2004-2012panel data as a research object, calculate Z index as a measure of bank stability proxy variables, and constructed bank regulation and market discipline agents indicators, At first, make a simple trend analysis of bank stability, descriptive statistics of each variable, followed by the use of Pearson correlation analysis, the panel regression approach to empirical research, and finally the use of robustness tests for robustness analysis of research findings, Through the above empirical methods to investigate banking supervision and market discipline’s mechanism of action and effectiveness to improve the stability of commercial banks.The results show that the stability of China’s commercial banks showed an upward trend in the overall,regulatory played a significant positive role in raising stability of banks, But the effectiveness of market discipline is poor, Risk behavior of commercial banks binding unsatisfactory, On this basis, we further analyze the constraints and weakening of reasons for the effectiveness of market discipline, At last from government regulation, market discipline, and other aspects of self-regulation give the policy recommendations to further improve the stability of China’s commercial banks.In this paper, the proxy indicators selection,construction of study variables and research methods has some innovations. In building banking supervision, market discipline and banking stability relations has originality, but the stability of commercial banks is a huge complex problem, involving many factors, but also the various factors contact and influence with each other, so although this paper make a new exploration in building the index system, but still can not avoid simplify the problem, make a simplified treatment on the choice of regulatory indicators, but also did not examine other stakeholders such as investors, these aspects need to be further improved.