A Stduy On Influences Of Corporate Governance Of Commercial Banks On Risk-Taking Behavior In China

Commercial Banks, with money as the product, operate with high leverage. Its existence and development must be on the premise of taking risks. Because of the influence of universality, gravity and persistence, in 2008 the outbreak of the financial crisis makes people realize that it’s not real that only government regulation could constrain banks’ risk-taking behavior, and corporate governance has a very important role in controlling the bank risk behavior. Therefore, this article has a research about that what and how corporate governance of commercial banks influences on risk-taking behavior in china, in which corporate governance includes internal governance mechanism and external governance mechanism.First, this paper theoretically analyses influences of the inner governance mechanism and external governance mechanism of commercial bank on risk-taking behavior on basic of economic theory. Internal governance mechanism includes ownership structure, organization checks and balances mechanism (including the board size, independent directors proportion, scale) of the board of supervisors and the incentive constraints mechanism (including the management compensation and ownership). External governance mechanism includes government regulation (including capital adequacy regulation, deposit insurance system, and franchise value) and market discipline. Secondly, on the basis of theoretical model of Jeitschko and Jeung, it joins the variable of government regulation and market constraint, builds a general theoretical analysis framework by considering of commercial bank’s internal and external governance mechanism, and discusses that how the internal and external governance influences on commercial bank risk-taking behavior.Thirdly, it selects 14 listed banks’ related data except everbright bank and agriculture bank from second half of 2007 to the end of 2012 as research sample, for half a year interval, and empirically researches on influences of the corporate governance on commercial bank risk-taking behavior. The empirical results show that: 1. Ownership concentration level of risk is u-shaped relationship with the bank, the first big shareholder of state-owned nature is negatively related to the bank’s risk level; 2. Influence coefficient between the scale of the board of directors and board of supervisors and bank risk level is small, but they are significant negatively related. The ratio of independent directors to all directors is positively related to bank risk level; 3. The management compensation is negatively related to the bank’s risk level. The bank in which managers hold equity tends to be at high risk level; 4. The regulatory capital is significantly negative correlation with the bank risk level. Depositors market constraints is negatively related to the bank’s risk behavior; 5. The asset scale is significantly related to bank risk level, and so is the capital leverage.Lastly, it puts forward policy suggestions on effect of corporate internal and external governance of commercial banks on risk-taking behavior in china.