Analysis Of The Impact Of Monetary Policy On The Robustness Of China's Commercial Banks

The financial crisis that broke out in the United States and swept the world in 2008 changed people's views on the risk neutral of Banks.This is mainly because this crisis was caused by the long-term loose monetary policy and low interest rate,which gave r:ise to asset price bubble and led to the increasing risks taken by financial institutions.It can also be said that the loose monetary policy affected the risk appetite of Banks and increased their risk bearing willingness,which prompted the whole financial system to accumulate a lot of risks and finally broke out the financial crisis.Outbreak of the crisis also make people see the soundness of the banking industry is the core of the entire financial system stability,improve the bank robustness will greatly reduce the possibility of financial crisis,however,most existing literature from the traditional monetary policy transmission channels to analyze monetary policy impact on the robustness of the bank,the bank risk-taking is also one of the important factors tfhat affect bank robustness,for this reason,based on bank risk-taking as intermediary variable to study the effect of monetary policy on bank robustness.On the basis of previous studies,this paper firstly analyzes the relationship between monetary policy and bank risk-taking and the relationship between bank risk-taking and bank robustness,and clarifies the channel of monetary policy through bank risk-taking.The impact on the balk's robustness,and then through theoretical analysis and empirical test,the comprehensive impact of monetary policy on bank robustness through various transmission channels is obtained.Finally,the mediation effect test model is used to illustrate the bank's risk-taking channel in the currency.The mediating effect of the policy on the banki's robustness,the specific content is as follows:This paper selects the annual data of 50 Chinese commercial Banks from 2007 to 2017 to form the unbalanced panel model,and selects appropriate methods from the fixed effect,random effect and mixed effect to estimate the model,and empirically analyzes how monetary policy affects bank robusiness through bank risk taking.The first step is to empirically analyze the impact of monetary policy on bank risk taking by taking the statutory reserve ratio and one-year lending benchmark interest rate as the proxy variables of monetary policy,the provision coverage ratio of non-performing loans and the z-value of bank bankruptcy risk as the proxy variables of bank risk taking.The second step is to empirically analyze the impact of bank risk taking on bank robustness by taking the provision coverage ratio and Z value of non-performing loans as the proxy variables of bank risk taking and the composite bank robustness index as the proxy indicators of bank robustness.The third step is to empirically analyze the impact of monetary policy on bank robustness by taking the statutory reserve ratio and one-year lending benchmark interest rate as the proxy variables of monetary policy,and the synthetic bank robustness index as the proxy index of bank robustness.The fourth step is to add bank risk taking into the model of monetary policy affecting bank robustness and explore the mediating effect of bank risk taking.Research conclusions:(1)changes in monetary policy can significantly positively affect bank risk-taking.Loose monetary policy will increase Banks' risk level,while tight monetary policy will reduce Banks' risk level.(2)the risk taking level of Banks has a significant negative impact on the robustness of Banks.When the risk taking level of Banks rises,the robustness level of Banks will decline.(3)there is a significant inverted u-shaped relationship between monetary policy and the robustness level of Banks.In the case of relatively tight monetary policy,the robustness level of Banks shows a change trend of first rising and then falling with the easing of monetary policy.(4)bank risk taking plays a part in the mediating effect of monetary policy on bank robustness.Based on the research conclusions of this paper-the following policy Suggestions are proposed:(1)To establish counter-cyclical macro-prudential management mechanism,and to appropriately restrain Banks' risk taking level to increase their robustness during the period of monetary policy easing.(2)The formulation of prudent and moderate monetary policies,too tight or too loose monetary policies will reduce the robustness level of Bank:s.(3)Improve the risk management level of Banks,so that Banks can respond more effectively to the impact of monetary policy changes on the robustness of Banks.(4)Banks should increase the degree of business diversification,broaden the profit channels.