Analysis On The Procyclical Behaviors Of Commercial Banks In The Economic Downturn Of China

Nowadays,the Macro-economy of China is facing a relative obvious period of economic downturn,and the pressure of downturn is relatively bigger in this fluctuating period and can be reflected in many respects of national economy.This paper will mainly focus on the characteristics of commercial banks individual behavior under the background of macro-economic downturn period.The target that this paper will study with is the selection of capital buffer of commercial banks which is the reflection of their procyclical behaviors.Commercial banks are still the outbalance pivot in the economic life in our country,and have direct influence on the implement of macroeconomic policy.They are playing distinctly important role in maintaining the stability in finance and macroeconomic.Since the commercial banks are pushed by maximize their own profits and are restrained by the regulation system which is concentrated on the Basel Agreement,their credit behavior have some degree of procyclicality.But since the Base III come into service,the regulation of keeping counter-cyclical capital buffer have come into power.The purpose of this regulation is to weaken the effect of banks’ procyclical behaviors on the fluctuation range of the macro economy.In China’s commercial bank system,the state-owned element have taken over a larger part for a long time,so the commercial banks in China are always thought to taken more factors resulting from policies.With this condition,research on the commercial banks’ procyclical behaviors during this period of macro-economic downturn have a certain theoretical and practical significance.This paper will do econometrics analysis based on dynamic panel data model by using an annual unbalanced panel data from the year of 2003 to the year of 2015.The data are collected from forty-one commercial banks in China.This paper is main made up of five chapters.Chapter one will introduce the main theme,background and research methods,then tell up the innovations and deficiencies.Chapter two will summarize the domestic and overseas articles associated with the research topic and raise the principal problems which will be empirical tested.Chapter three will mainly do some statistics on some indexes about the macro economy and the commercial banks’risk,the purpose is to reflect the descending trend of economy and the risk-taking situation of banks.Chapter four will do empirical tests on the periodicity of capital buffer and banks’ credit behaviors.Chapter five will summarize the research conclusions and come up with some feasible policy recommendations.After theoretical analyzing and empirical testing,this paper conclude of these three consequences:(1)During the period that this paper studies in,the commercial banks have the characteristic of procyclicality,but this characteristic is weaker within the state-owned large-scale commercial banks and city commercial banks.The reason speculated is these two kinds of banks have much closer relations with the government,so they have suffered bigger influence of factors resulting from policies.So their level of marketing when manage are lower than the other kinds of banks.(2)The source of China’s banks’ capital buffer adjustment are mainly by means of denominator channels.(3)When the regulatory authority raise the stipulation of commercial banks’ capital buffer level,the banks’ credit behaviors will also change,and this will have a certain degree effect on weakening their procyclicality.