Research On Liquidity Risk Of Listed City Firm

For a long time, the issue of liquidity risk has made a widespread attention especially since subprime crisis in2007, the liquidity risk of commercial banks is heating up again. City commercial banks as the third ladder of banking,they have made an irreplaceable role for local development, however many questions exposed gradually with the growing and development of city commercial banks. Such as loan concentration, excessive dependence on loan, the poor intermediate products, inextricabe link with local governments, the existence of a large number of bad loans and unsound talent mechanism,All of these factors restrict the continued development of the City commercial Banks. In face of the deepening market-oriented interest rate reform,it is a problem worthy to be discussed how should the City businesses bank control the liquidity risk in order to achieve profit. Based on the bank of Beijing, nanjing, ningbo which listed and had a excellent operating performance, analysis the risk index in a comparative way, and apply the econometric model,in order to provide reference for reasonable management of other city business banks.This paper is divided into five sections. The first part is an introduction, describes the research background and significance of the topic, this paper combes the study and literature review of liquidity risk of for commercial bank in home and abroad,introduces the framework and research methods of this paper,clarifies the definition of city bussiness bank, at last this paper, summarizes the possible innovation and shortcomings.The second part is the theoretical basis of commercial bank liquidity risk, to proceed with the research literature about liquidity risk at home and abroad, makes description and analysis based on the concept, classification and some other related theories of liquidity risk, and introduces the main evaluation methods and metrics of measuring liquidity risk. The third part is to analyze the empirical measure before the relevant indicators of the status of the listed city commercial banks and liquidity risk data. The main indicators are: loan-to-deposit ratio, liquidity ratio, non-performing loan ratio, loan concentration, the proportion of non-interest income, provision coverage and so on. The fourth part is the main content of this article-An Empirical Analysis. First, To determine the basic idea of empirical analysis, according to the theory to select the appropriate explanatory variables and explained variable accordingly and, do the data collection and collation for each variable. To do the unit root test to eradicate falsehood, then find integration and flexibility. Second, to model and start the empirical analysis based on the related risk indicators’ average value of Beijing, Bank of Nanjing and Bank of Ningbo bank, and use the way of combination for quantitative and qualitative to analysis the influence factors on the City firm’s liquidity risk. Finally, empirical conclusions drawn, first, the core capital adequacy ratio of city commercial banks significantly affect liquidity risk, the not the higher, the better; Second, the bank’s profitability and liquidity risk is proportional, which may be related to the immature of the city firm at this stage, the improvement of profitability is based on the sacrifice of bank’s liquidity. And third, non-performing loan rate related to the navigate sense of liquidity risk. This may be due to the increase in the proportion of non-performing bank loans in the past. In order to continue healthy business, the bank has to adopt measures to reduce the loans, deposit ratio declined, the liquidity risk declined accordingly. Fourth, city commercial loan concentration radio affect liquidity, the higher the degree of concentration of the loan, the greater the appropriate liquidity risk, which is the higher concentration radio of loan, the higher risk of liquidity risk, which is also confirm with our usual perception. The fifth part is from the macro level, the City firm itself and the local government providing advices to strengthen liquidity management of the city. The advises from the macro point of views included improve the liquidity indicator system, accelerate market-oriented interest rate reform, the establishment of a deposit insurance system and improve the information disclosure system from the firm’s own recommendations to improve the city include:improved balance sheet structure, improve the corporate governance structure, the establishment of risk monitoring and early warning mechanisms; recommendations from local governments and city commercial relations perspective are:the weakening of the local government should contact local government ownership of local commercial banks should also be given to the City firm manpower support, rational treatment of the GDP, establish and improve the scientific cadre examination mechanisms.