An Empirical Analysis Of The Impact Of Credit Business Competition On Credit Risk Of Commercial Banks

In recent years,the non-performing loan rate and the balance of non-performing loans in China's banking industry have continued to rise.Although the overall control is now under way,the credit risk of the banking industry can not be ignored.In this context,it is of great practical significance to study the impact of credit business competition on credit risk in China's banking industry.Firstly,this paper systematically combs the domestic and foreign research on the relationship between banking competition and credit risk,and determines the research ideas of this paper.Secondly,this paper analyses the impact mechanism of banking competition on credit risk from three perspectives.Then,using the panel data of 133 banks in China from 2011 to 2018,this paper makes an empirical analysis of the relationship between bank credit business competition and credit risk.It is mainly divided into two parts.The first part is to analyze the competition degree of banks measured by Lerner index and the credit risk of banks measured by non-performing loan rate in order to grasp the changing trend of competition degree and credit risk level of our banking industry in 2011-2018.The second part establishes panel data regression model including Lena index with non-performing loan rate as explanatory variable,carries out empirical analysis,and then carries out difference analysis for different types of banksThe results show that the overall competitiveness of China's banking industry is relatively low,the market power of state-owned banks and rural commercial banks is greater than that of joint-stock commercial banks and urban commercial banks.During the sample period,the competitiveness of China's commercial banks is positively correlated with bank risk.It supports the "competition-vulnerability hypothesis".The study also finds that changes in banking competitiveness have greater impact on state-owned banks and rural commercial banks than on joint-stock commercial banks and urban commercial banks.Finally,based on the empirical results,this paper puts forward relevant policy recommendations to improve the stability of China's banking industry and reduce bank risks.