The Research On Stock Market Cycle Effect Of Listed Banks’ Capital Buffer

Basel Ⅲ put forward the policy framework of countercyclical capital buffer, to relieve the pro-cyclical effect of capital regulation to the adverse impact of the operational stability of the banking industry. However, the current domestic and foreign research on bank capital buffer cycle effect is mainly focus on capital buffers and the relationship of the economic cycle, only consider the economic cycle fluctuation to the effects of bank capital, and did not take into account the fluctuations in the stock market cycle also can cause a huge loss to Banks’ capital. Because of the economic cycle and the stock market are not synchronized, the stock market is in advance of the economic development, therefore, we cannot generally focus on the economic cycle and the relationship between bank capital buffers, bank capital buffers which are inverse of the economic cycle cannot protect to the bank funds advance from the economic cycle in the stock market cycle. In our country, even if it has clearly stipulated under the present situation of decentralized management, there is still bank funds enter the stock market in the game through various channels. Therefore, by using an unbalanced panel data from2000to2012of Chinese listed banks to study the relationship between the listed banks’capital buffer and the cycle of economic and stock market. The empirical results showed that (1) Chinese Listed banks’ capital buffer had a significant countercyclical effects of economic and stock market.(2) The level of capital had a significant impact on the capital buffer.(3) The stock market will affect the bank’s capital buffer by bank credit.(4) The ownership structure and size difference of banks will affect the behavior of capital buffer cycle.