The Study On The Impact Of Interbank Business On The Risk Taking Of Commercial Banks In China

In recent years,interbank business has grown rapidly and constantly innovated in the form and function of business in order to make a profit and avoid regulation.Due to some advantages,such as reducing capital,avoid the loan to deposit ratio limit and so on,interbank business has been favored by commercial banks,but there are also many risks.Commercial banks tend to provide loan via interbank business channels,which could avoid credit control,so the credit risk management has been weakened.Interbank business's maturity mismatch is serious,which could increase bank's liquidity risk.Interbank business chain continues to expand,which enhance the degree of correlation between financial institutions,so the risk is likely to lead to inter institutional infection and systemic crisis.Therefore,the development of interbank business will inevitably influence the level of commercial banks' risk taking,and may even affect the safety and stability of the financial system.This dissertation on the impact of interbank business to commercial banks' risk taking has a certain theoretical and practical significance.This dissertation studies on the impact of interbank business to commercial banks' risk taking from the theoretical and empirical perspective.The theoretical analysis shows that the interbank business mainly influence the risk taking of commercial banks through credit risk,liquidity risk and risk contagion between financial institutions.In the empirical part of the paper,we introduce the first lagged variable of banks' risk taking,build a dynamic panel model,and conduct a regression analysis and the test for heterogeneity from the perspective of interbank assets,based on the data of 42 commercial banks.In the empirical part,interbank business variables include interbank assets' scale and structure variables,bank's risk taking variable uses the value of Z,and the empirical method is the system GMM.The research results show as follows:Firstly,in the scale of interbank asset,the commercial banks have a positive effect on the risk taking,that is,the expansion of interbank asset significantly increases the risk of banks.Secondly,in the structure of interbank asset,traditional interbank asset business(Deposits in other banks and Funds lent)scale has a negative influence on bank's risk taking;New interbank asset business(Buying back the sale of financial assets)scale has a positive influence on bank's risk taking.The positive effect is greater than the negative effect.Finally,the impact of interbank asset on risk taking has heterogeneity in commercial banks of different financial characteristics.According to the impact of interbank business on banks' risk taking,this dissertation puts forward some suggestions in terms of promoting standard development of interbank business and improving financial regulation about interbank business from the perspectives of commercial banks and regulators.These suggestions are aimed to prevent and control risks of interbank business and improve bank's ability to take risks.