Does Derivatives Increase Banks Risk-taking?

The development of derivatives market is an important symbol of financial reform and innovation, and commercial banks are the main participants in the derivatives market, the use of derivative instruments to hedge exchange rate, interest rate, credit and other financial risks, can better play the function of financial intermediation, improve the operating efficiency of financial assets, financial assets pricing mechanism, but also has the characteristics of virtual, cross period and information asymmetry. In this paper, the annual report data and BANKSCOPE data of 16 listed commercial banks in 2006~2014 were used to analyze the related information of the Hausman test, and the effect of bank individual effect, macro economic situation and bank characteristics were considered, and the interaction effect of financial derivatives on bank risk is considered. The first is that the financial derivatives are significantly increased in the whole sample. Second, overall, the monetary environment and the risk of the bank to bear the negative correlation, that is, low interest rate environment to increase the risk of banks, and specifically, the low interest rate monetary environment for the state-owned banks to bear the impact of the impact on the risk of the Bank of ordinary shares to take a greater impact. Third, for the further investigation of the interaction effect between monetary environment and financial derivatives, this paper finds that the high interest rate environment significantly reduces the impact of financial derivatives on the degree of bank risk, that is, the risk of high interest rate environment and low derivatives hedging, the domestic commercial banks in the domestic commercial banks to assume a low level. Fourth, the use of financial derivatives will increase the volatility of bank earnings, that is, from the perspective of the proceeds of the financial derivatives of the positive effects of the bank's risk.