The Relationship Between The Real Estate Risk Premium With Commercial Bank Preference

The 2008 financial crisis made people deeply aware that the behavior of financial intermediaries such as commercial banks and security companies could lead to serious financial crisis.Therefore,after the crisis,Many scholars began to research financial intermediaries risk preference in the economic stability and crisis status.They found that the financial intermediary risk preference has a significant impact on the asset risk premium,especially,in the real estate market.The real estate market is in rapid growth in China,which display rising prices and serious bubble problem,but due to the short time of reform of the real estate market in China,the policy formulation,policy implementation and financial intermediary institutions implementation of credit risk is insufficient,studying the relationship between China's real estate risk premium and risk preference of financial intermediaries is important.However,there are very few researches on the relationship between real estate risk premium and risk preference of commercial banks in China,which does not take into account the current premium of real estate market and the relationship with bank risk preference.Therefore,this paper studies the relationship between real estate risk premium and risk preference of commercial banks in China,and hopes that the relationship between the two can be obtained through research and analysis.This paper tacked non-performing loans as the commercial bank risk preference,collected the financial data from 2006 to 2015 separately.Firstly,the paper analyzed the national data with VAR model,co integration test,and then selecting the 31 provinces data,studying the 31 provinces data in panel model,taking into account the policy promulgated by the State council,introduce dummy variables”Purchase order”,examining the impact under its influence.It found there are closely connection between commercial bank risk preference and the real estate risk premium.That means when the risk preference of commercial bank is higher,the real estate risk premium will actively,but the influence of the real estate risk premium in the risk preference of commercial bank is not evidently,which may be caused by that there are other factors influence the risk preference of commercial bank in China.And because the development speed in different provinces is different,the relationship between the two show distinct characteristics.