The Effect Of Liquidity Regulation On Chinese Commercial Banks’ Loan Supply

The financial crisis in 2008 and the money shortage in 2013 all reflect that commercial banks don’t pay enough attention to liquidity risk.Under the background of the crisis,the Basel Committee has issued a series of liquidity regulatory documents,putting forward a universal global liquidity coverage and net stable funding ratio ratios for the first time.Subsequently,CBRC(China Banking Regulatory Commission)has repeatedly improved the liquidity supervision of commercial banks.With the acceleration of financial disintermediation,the rapid development of Internet finance,the rising of shadow banks and the change of bank’s business model from "distribution-holding" to "distribution-distribution",which makes changes to the liquidity environment of Chinese commercial banks,and at the same time,put forward higher requirements for liquidity risk management of all the commercial banks.This paper studies the impact of liquidity regulation on the loan supply on Chinese commercial banks using theory and practice,the overall and comparative methods.First of all,the paper analyzes the liquidity supervision system of Chinese commercial banks.Next,the paper generally and comparatively analyzes the liquidity situation of commercial banks as a whole and different types of banks.Then,the paper selects Chinese 72 commercial banks from year 2008 to year2015 as non-equilibrium panel data samples,using system GMM model,to analyze the impact of net stable funding ratio and liquidity ratio on the supply of bank loans in theory and practice.The results show that:(1)The increase of net stable funding ratio regulation will decrease the growth rate of bank loans.Specifically,the increase of net stable funding ratio regulation will cause the loan growth of joint-stock banks and city commercial banks to decrease significantly,but it has no significant impact on the state-owned banks and rural commercial banks;(2)The increase of liquidity ratio regulation has no significant impact on the loan growth of Chinese commercial banks.Among them,the increase of liquidity ratio regulation will make the loan growth of state-owned banks decline significantly,but it has no significant impact on joint-stock banks,city commercial banks and rural commercial banks.Finally,this paper gives some suggestions based on the results of theoretical and empirical analysis,which provides reference of the management of liquidity risk for Chinese commercial banks and even the supervisory authorities.