Research On The Measurement And Influencing Factors Of The Liquidity Creation Of Life Insurance Companies

In 2017,the national financial work conference proposed to guard against financial risks.In terms of liquidity,we must continue to implement prudent monetary policy,keep credit growth moderately and liquidity basically stable.Liquidity creation is an important topic for banks,and is also important for life insurance companies.Liquidity create functions make banks more vulnerable to run,and it is likely to generate crises through contagious effects.This paper studies the role of the life insurance company in the liquidity creation of the financial system from the perspective of the stability of the financial system and the prevention of financial risks,which has certain regulatory significance.Scholars focus on the field of liquidity creation mainly in the field of banking.Firstly,based on the theoretical mechanism of liquidity creation,this paper introduces the theory of liquidity creation of financial intermediaries proposed by Diamond and Dybvig(1983).And with the continuous development of financial institutions,non-bank financial intermediaries,such as insurance companies,provide liquidity support to the market by issuing various non monetary claims(usually including claims of insurance policies,fund shares,shares and other securities).It's also creating liquidity for the social and financial system in this process.From the related empirical results;we conclude that in the creation process of financial market liquidity,life insurance companies play the role of liquidity de-creator.Although the total assets of the insurance industry are not as large as that of the banking industry,the role of life insurance companies is of great value.According to the "cat-(non)fat" liquidity creation measurement model,it can be seen that the key to the creation of liquidity is that the life insurance companies convert the liquidity liabilities into less liquidity assets,that is the maturity matching structure of the life insurance company's assets and liabilities creates liquidity creation.The relationship between capital and liquidity creation of life insurance companies is based on the empirical results of large and medium-sized life insurance companies.We verify that the small and medium life insurance companies conform to the"financial fragile extrude hypothesis",which is consistent with the study of Berger and Bouwman(2009),In addition,for different types of life insurance companies,the factors affecting the liquidity creation and the direction of the action are different.Besides,the sensitivity of each influence factor is also different.