Impact Of Credit Information Sharing On Risk-taking Of Commercial Banks

In the 1990s, with the reform and opening up gradually stepping into various aspects of China, there are more kinds of participants in economy and the scope of financial services also have expanded, meantime, the debt default also rises in commercial banks. Thus, commercial banks in China put forward the demand of credit information sharing and they are eager to have a platform to share information of the borrowers which will be able to know more about the borrower's credit information. Therefore, the credit information database established by the PBC will be helpful to deal with market risk led by asymmetry information. The significance is undoubtedly important for the establishment of the credit information sharing platform. Credit information sharing not only has positive effect in avoiding credit risk and improving credit market efficiency, but also will promote the transfer of commercial banks in operation, management and services. In addition, it will avoid financial risk and has significance in promoting credit environment and fastening the establishment of credit system. In this dissertation, it selects 16 listed commercial banks in China as the sample and the data will be from 2004 to 2013. In term of theory, the dissertation mainly concludes the mechanism on the impact of information sharing on risk-taking of commercial banks and it will include three main aspects. In term of the empirical model, on the basis of research at abroad, the dissertation firstly introduce the credit information sharing index to measure the degree of credit information sharing, at the same time, the dissertation also choose the non-performing loan ratio and Z value respectively to measure the credit risk and overall risk of commercial banks. And then build a model which includes credit information sharing level, bank level and macroeconomic factors. After the empirical test, choosing the most suitable panel model and discussing the empirical results.Finally, the dissertation concludes that the credit information sharing realized by credit reporting agency greatly decrease the asymmetry information between commercial banks and the loan applicants. Though Chinese credit reporting industry has developed significantly in the past ten years, there is big gap between China and the developed countries, and even lags behind some countries which have the same economic development level or locate at the same region. In term of risk, in general, the overall risk and credit risk of joint-stock commercial banks is lower than that of state-owned commercial banks. The empirical results indicate that credit information sharing realized by the basic credit information database plays significant role in reducing the risk-taking for commercial banks in China. In addition, there is obvious lag effect for the risk-taking of commercial banks, and the size of commercial banks, savings ratio and capital adequacy ratio also have significant impact on risk-taking of commercial banks.