A Dynamic Research Of Liquidity Creation,Capital Regulation And Bank Profitability Of Commercial Banks

Under the background of financial globalization,the rapid development of Internet technology,the financial industry has also been a new development,and the market competition in this industry is increasingly fierce.In the financial field of China,the economic income of the bank has a great influence on the financial system,so the economic development of the bank is very important.In 2010 the Basel Committee issued the "Basel III",under the agreement,not only pointed out the importance of higher capital adequacy ratio is also clearly pointed out,to integrate on the liquidity supervision index in the new process to reduce bank risk loss,thereby enhancing the risk supervision.In July 2017,China's Banking Regulatory Commission promulgated the "capital management measures for commercial banks"(Trial Implementation)in June 2012,and strengthened capital supervision.The status of capital regulation has not changed,but has been further strengthened.Therefore,the influence of the bank's profit should be paid attention to two aspects of capital and liquidity.The banking industry requires more strict capital regulation will raise the cost of capital,reduce the bank's liquidity creation ability,this will lead to lower credit and investment activities,so the banks will receive lower benefits,regulatory capital will improve the flow of funds from the deposit transfer to the liquidity,and finally will reduce the liquidity in banks the ability to create.But there are also many scholars think that capital regulation can affect the commercial bank's profitability and liquidity creation,regulatory capital high bank is unlikely to risk taking excessive so as the loan decision with less distortion,the moral risk is low,bank profitability is higher,to support the importance of regulatory capital.Therefore,based on the above point of view,the dynamic relationship between liquidity creation,regulatory capital and bank profitability has become the focus of this study.This paper firstly create liquidity,profitability and bank regulatory capital respectively by correlation analysis,secondly elaborated the related hypothesis of the relationship between the three and the theoretical analysis,based on the micro data of2007-2016 years Chinese 54 Commercial Banks,establish three panel vector autoregressive model,an empirical difference between different samples based on the analysis of the liquidity creation,and confirmed the interaction between regulatorycapital and the ability of banks.At the same time,this paper proved the following contents: in the banking business,the profit level is inversely proportional to the same regulatory capital;regulatory capital city commercial banks can create liquidity constraints,but the state-owned and joint-stock banks is not established;city commercial bank liquidity and profitability level of the bank to create significant positive related.However,there is no significant correlation between the liquidity creation level of state-owned and joint-stock banks and the profitability of banks.The regression results of this paper prove the importance of strengthening capital regulation and liquidity creation supervision to the profit and stability of the banking industry.