Research On The Profitability Of China's Commercial Banks Based On Liquidity Risk Supervision

The global banking industry suffered a shortage of liquidity and a severe downturn in profitability,caused by the United States subprime mortgage crisis in 2007.A series of banking liquidity risk crisis has historic the Basel Committee issued Basel ?-liquidity risk regulatory framework,and the aim is to reduce the liquidity risk of commercial bank,at the same time improve the ability of long-term stable operation.Affected by the global liquidity crisis,our country's commercial bank profit growth have faced with the serious decline and liquidity is very serious.The event of "money shortage" in June 2013 and most of the banks in our country profit growth closed to zero in 2015 is a wake-up call.Since then China's banking regulatory commission(CBRC)perfect the liquidity risk regulatory framework,hoping that tighter liquidity risk supervision improve the liquidity of commercial banks,strengthen its operating ability,and pull the profit growth up.But it is unclear whether the strict regulation of liquidity risk can improve our country commercial bank profitability.In order to research on the issue,this paper makes a literal review on the supervision of liquidity risk as well as the impact on profitability,and analyzes the mechanism of the effect of the liquidity risk regulation on the profitability.Based on the supervision of liquidity risks,this paper uses comparative analysis and empirical analysis method to study the influence of liquidity risk supervision on the profitability of commercial banks in China.According to the results of analysis,this paper puts forward some suggestions.The main innovation of this paper is to study the effect of net stable funding ratio(NSFR)on the profitability of China's listed commercial banks by empirical analysis.Although China has not yet formally introduced regulatory indicators of NSFR,in order to analyze and forecast the influence of NSFR on China's commercial banks,this paper,with reference to previous calculation methods,estimates the NSFR of commercial Banks in China and analyzed the influence of NSFR on China's commercial banks' profitability.The important conclusion of this dissertation is:(1)liquidity risk supervision has a direct and indirect influence on the profitability of commercial banks.The performance of directly affect are the change of financing cost,risk of net assets and loan structure,and indirect effect is affected by the financial market and the internal governance structure.Direct influence and indirect influence are connected with each other;(2)under the supervision of liquidity risk,China's commercial Banks liquidity,on the one hand,is very abundant.All listed banks' Liquidity coverage ratio(LCR)meet the regulatory requirements in 2015,and liquidity ratio(LR)have far exceeded the regulatory requirements in recent years.On the other hand,liquidity is becoming worse and the profitability is suffering a sharp decline;(3)by calculating the NSFR,we found that the part of China's listed commercial banks' NSFR don't reach the standard,and they need to be improved in the future;(4)LR have a negative impact on the profitability of commercial banks,and it weaken the profitability by weakening the debt assets yield.NSFR can improve the commercial bank's return on invested capital,and it has a positive effect on profitability;(5)on the full text of empirical results,this paper puts forward some suggestion that commercial banks should optimize the structure of assets and liabilities,enhance the capital adequacy and control liquidity ratio level and so on.Supervision departments should adjust the liquidity ratio regulatory measures and introduce NSFR as soon as possible.