Impacts Of Capital Adequacy Ratio On Credit Of Commercial Banks In China

Minimum capital requirement is one of the three pillars of "Basel Agreement" banking supervision,it is necessary to ensure the health of commercial banks operations and steady development, and capital adequacy ratio is the indicator of specific capital regulatory requirements. Regulatory capital adequacy ratio, the amount of bank capital banking regulators according to their assets, the bank’s risk profile and their actual operating environment, the proposed must hold in order to ensure that banks can effectively manage their own capital, to establish capital adequacy management mechanism, enhance the ability of banks to resist risks.Countries around the world are trying to find common international capital regulatory standards, but failed, until July 1988, the Basel Committee meeting in Basel, Switzerland, and adopted the "unified international bank capital calculation and capital standards ". Adequacy regulatory capital adequacy ratio has been an important unified national standards of prudential supervision of the banking sector, with the proposed "Basel II", more and more countries with reference to the agreement of the regulatory capital standards, to implement the agreement of the national bank capital rate regulatory requirements to guard against operational risks of the banking system.With the development of the world and progress of science and technology, these factors make banking more complex and diversified. In this environment, banks use of new innovative financial instruments to manage financial controls, leading to "Basel II" can not cope with some of the real situation and problems that appear. In particular, since the financial crisis in 2008, countries have strengthened the banking regulatory capital, while the capital adequacy ratio of capital as the main indicators of banking supervision, has been widespread concern around the world, countries continue to develop in accordance with the Basel Committee standards to improve their regulatory capital requirements.Regulatory capital of our country can be divided into three stages, prior to 1995, China’s regulatory capital is still in the stage of simple executive order, this stage of the lack of a mandatory regulatory capital regulations; from 1996 to 2003, our regulatory capital development to system construction period, mainly by institutions supervision, supervision of capital adequacy ratio also gradually standardized; from 2004 to the present, our country capital regulation in substantive implementation period, China has gradually established norms of capital regulation.At present, China’s financial regulatory authorities in accordance with the introduction of the new Basel Ⅲ in order to improve our regulatory banking capital adequacy ratio.When the capital adequacy ratio increased,in short term, banks’ loans decreased, the credit will reduce the economic development. This article is theoretical and empirical analysis, using the data of 11 banks from 2004 to 2014.This paper can be divided as follows:The first chapter describes the impact of bank capital adequacy ratio of credit research background and significance. in regulation.In this part, it also introduced domestic and foreign scholars on the capital adequacy ratio of the impact on credit, obtained regulatory capital adequacy ratio of bank credit to reduce the lead to conclusion.The second chapter describes the evolution of international capital regulatory development process. This chapter also describes the changes of the system of capital regulation and supervision of capital adequacy ratio of capital adequacy practices and regulatory status quo.The third chapter of Capital adequacy ratio for credit analysis of the impact theory, about the regulatory capital adequacy ratio tightening effect, the effect of monetary policy on bank credit. This chapter also discusses the impact of the capital adequacy ratio of Bank of Credit theoretical mechanism to provide a theoretical basis for the following empirical analysis.The fourth chapter is empirical analysis part, we select the panel data of 11 commercial banks, prior to drawing on the basis of research scholars, the establishment of a panel analysis model, using Eviews software for analysis. From the empirical results, the capital adequacy ratio and a negative correlation between bank credit and improve capital adequacy ratio.The fifth chapter is mainly based on empirical analysis concluded, further summarize, recognizing the bank’s capital adequacy ratio to meet regulatory requirements at the same time, to fully understand the impact of the strengthening of the regulatory capital of the banking sector. Meanwhile, China’s financial regulators should also be the reality of our banks, for different bank classification worked out in line with our current situation of the bank’s capital adequacy ratioIn summary, the main contents as described above, it was concluded mainly loans regulatory capital adequacy ratio of commercial banks in China, higher capital adequacy requirements, banks will produce credit reduction. Based on the analysis we concluded, make policy recommendations to banks and government regulators to reduce the adverse effects of the regulatory capital adequacy ratio of bank credit and our economy.Research method, mainly from the standpoint of both theoretical and empirical, theoretical research and prior to the economic theorists on the basis of established empirical research analysis model through empirical panel data model to analyze the impact on the capital adequacy ratio of commercial bank credit, on this basis, draw conclusions and make recommendations accordingly.The innovation of this paper is based on the 2010 Basel Committee to develop a "Basel III", combined with the regulatory status quo of China’s commercial banks’ capital adequacy ratio,based on the theoretical analysis, the establishment of the panel Empirical studies were analyzed from both supply and demand factors influence bank credit; paper analies the overall impact of the capital adequacy ratio of commercial bank credit, and studies the Chinese state-owned joint-stock commercial banks,on this basis, draw conclusions and make recommendations accordingly.Because of my limited knowledge, the article’s shortcomings are as following:As knowledge level limitations, this article selected panel model is limited, if the use of more complex models the results may be more accurate; paper selected 2004--2014 years of data that does not include the complete cycle of economic development, there may be some deviation in the results; the impact on bank capital adequacy ratio includes not only the number of credit terms also include structural,this paper only analyzes the quantitative aspects, the conclusion may not be comprehensive, it needs further study.