Empirical Analysis Of The Influence Of Diversification On Liquidity Risk In China's Commercial Banks

With the continuous development of economic globalization,the financial market has caused a wave of diversification.China's commercial banks actively develop a diversified development strategy,continuously carry on the business structure,the income structure optimization and the innovation,to realize the bank more comprehensive development.In this process,the specific performance is that commercial banks gradually reduce their dependence on traditional credit business,and non-traditional businesses gradually increase,and non-interest income accounts for a higher proportion.Most scholars have focused on the risk and profitability of banks,but they don't have reached a consensus on how diversification will affect banks.Some scholars believe that diversification will spread risks and increase bank profits,while some scholars believe that diversification will increase the probability of risk and it can reduce profits of banks.After summarizing founds,there are few scholars to subdivide risks,Most scholars directly target the overall risks facing banks,so this article will refine the risk for liquidity risk,it has the certain innovation significance.The reason of the choosing liquidity risk as the research object is that the liquidity is one of the important principle of commercial bank management,only to maintain adequate liquidity to guarantee the safety of banks and profit-making.In addition,the forming reason and the influence of the liquidity risk is more complex,the commercial bank daily operating conditions can have a certain influence on liquidity,so diversified business of commercial banks liquidity level is what kind of impact,so it is worth studying.Based on existing research,this paper will be diversified effect on liquidity risk as the research subject,to diversify business as explanatory variables,be explained variables for the liquidity risk.According to “ask questions,theoretical research,the status quo analysis,empirical analysis,and come to the conclusion” for the empirical analysis,and based on the theory of scope economy and synergy effect,risk diversification to analyze the empirical results.Firstly,the research background,significance and purpose of research are determined,and relevant results of domestic and international business diversification and liquidity risk are sorted out and relevant theories are summarized.Secondly,based on theenvironment of China's commercial banks,the paper qualitatively analyzes the current situation of commercial bank diversification and the current situation of liquidity level.Finally,we sorted out the relevant index data of 20 commercial banks in China from2005 to 2015,established the panel data model,and analyzed the results.The empirical results show that:(1)the liquidity risk can be spread by business diversification in a certain extent,the effects could be explained by the theory such as economic effect,synergistic effect and risk diversification,and we can puts forward how to better implement diversification strategy to reduce the happening of the commercial bank liquidity risk.(2)the different types of commercial banks has no significant effect on this risk dispersal effect.The reasons for this result may be the diversification of China's commercial banks is still in its infancy,the degree of diversification is generally not high,so both the state-owned and non-state-owned commercial banks,listed banks and private banks,their influence is not significantly different.Another reason may be that the selection of sample size is not big enough.At last,the paper puts forward to some suggestions on how to better develop diversified business and how to manage liquidity risk.The innovation point of this paper is:(1)locate the research object to the liquidity risk and study the specific impact of diversification on liquidity risk.(2)taking the proportion of the total amount of assets to total loans as the measure of diversification in table,together with the overall business diversity measure as explanatory variables.The relationship between business diversification and liquidity risk is analyzed in a more comprehensive way.