An Analysis On The Influence Between Interbank Business And Risk Taking Of Listed Commercial Banks

Motivations of interbank business expansion are avoiding from regulation,interest rate liberalization and procyclical credit demand from real economy theoretically,however,it incurs liquidity risk,interest risk,credit risk and operational risk.Considering the endogeneity of interbank expansion,we conduct an empirical research based on panel instrumental variable method and discover that(1)interbank expansion has increased risk taking of bank significantly.(2)on the one hand,risk taking of bank was promoted by leverage,ownership concentration and non performance asset ratio,on the other hand,it was demoted by capital adequacy ratio,asset size,ratio of deposit to total liability and loan to total asset.Hypothesis of High risk yields high return was not examined empirically.Based on the panel instrumental variable method,we test how it increase the risk taking with development of interbank asset,the result shows that volatility of total asset return has increased with the development of interbank business,but has no impact on the total asset return and capital demand,namely it has decreased return per risk and capital demand per risk,which resulted in higher probability of bankruptcy of commercial banks.