Research On The Impact Of Increasing Capitaladequacy Ratio Of Commercial Banks On Their Profits And Real Economy

With the process of capital increase and deleverage of commercial banks,especially the amount of credit of our banks is strictly controlled by the banking regulatory authorities,which will have a certain impact on the profits of commercial banks.The accumulation of profits of commercial banks will affect the growth rate of capital of commercial banks,and then affect the amount of credit,which will ultimately be reflected in the support of banks to the real economy.The purpose of this paper is to study the internal and external impacts of improving capital adequacy ratio of commercial banks.which is,the direction and degree of impacts on the internal profitability and the development of external real economy,and then to make suggestions for the formulation of more realistic regulatory policies.Firstly,this paper summarizes the contents of the new banking regulatory regulations formulated by the International Banking Regulatory Commission,namely the Basel Committee and the China Banking and Insurance Regulatory Commission,and analyses the level of capital adequacy ratio of commercial banks in China at the present stage and the impact of improving the profitability of banks and the real economy.Secondly,this paper empirical analysis of the impact of improving capital adequacy ratio of commercial banks on their profitability and real economy by using actual data.In terms of the impact on their profitability,since the five major state-owned banks belong to systemically important banks and the other joint-stock banks belong to non-systemically important banks,they are discussed separately to make the analysis more pertinent.Using the panel model,this paper regards the return on assets as the explanatory variable and five variables including capital adequacy ratio as explanatory variable.It is concluded that the capital adequacy ratio of the five state-owned banks and other joint-stock banks will have a positive impact on the return on assets.This demonstrates from the empirical aspect that raising the capital adequacy ratio is beneficial to increasing bank earnings.In the aspect of studying the impact of deleveraging on real economy,this paper chooses VAR model and uses impulse response function and variance decomposition technology.Theresults show that the increase of capital requirements will have a negative and then positive impact on money supply,a sustained inhibitory effect on CPI growth,and then on GDP and fixed assets investment.Finally,the impact on unemployment rate will be positive and negative.Finally,this paper argues that in order to optimize the effectiveness of the capital adequacy rate regulation policy of commercial banks,the banking regulatory authorities should formulate appropriate capital regulation system according to the current situation of our banks,and commercial banks themselves should establish corresponding supplementary capital mechanism and develop new profit channels.