Research On The Impact Of Business Diversification On The Operating Risk Of Commercial Banks

In recent years,under the influence of the macroeconomic downturn,the reform of interest rate marketization and the intensification of financial demonetization,the profit margin of the traditional credit business of commercial banks has been continuously narrowed.Commercial Banks started to expand diversified businesses in order to make up for the loss of profits.Can business diversification diversify the operating risk of commercial Banks?Is the relationship between the business diversification level and the risk bearing of commercial Banks with different asset sizes consistent?The above problems need to be solved.In order to answer the above questions,this dissertation first reviews research status at home and abroad,explains the influence mechanism of business diversification on the operating risk of commercial Banks,and then puts forward the research hypothesis.Using 2013-2018 financial data of 32 listed banks in China,this dissertation analyzes the Chinese status of business diversification of commercial Banks.Finally,the entropy index is used to measure the degree of business diversification of commercial Banks,the principal component analysis method is used to construct the business risk evaluation system of commercial Banks,and the comprehensive index of business risk of commercial Banks is compiled.Based on the panel threshold model,the influence of business diversification on the business risk of commercial Banks from the perspective of heterogeneous asset scale is investigated.The results show that the impact of business diversification on the risk of commercial Banks has a dual threshold effect based on the threshold of asset size,which is 714.526 billion yuan and 7204.198 billion yuan respectively.Based on this,Banks are divided into three categories according to the size of assets:small,medium and large.For medium and small commercial Banks,business diversification aggravates the risk,and the risk aggravation degree of small Banks is greater than that of medium-sized Banks.For large commercial Banks,diversification dilutes risk.When the asset size is less than a certain threshold value,the enhancement of business diversification will aggravate the risks of commercial Banks,but the aggravation degree will gradually decrease with the increase of bank asset size.When the asset size exceeds a certain threshold value,the effect of business diversification and risk diversification becomes significant.Based on the results of theoretical analysis,status analysis and empirical analysis,this dissertation puts forward relevant policy suggestions:In the process of implementing the business diversification strategy,commercial Banks should give full consideration to their own scale characteristics and risk resistance ability,choose a sensible business diversification policy.At the same time,the regulatory authorities should strengthen the monitoring and warning of the business diversification risk of commercial Banks.