Managerial Ability,Revenue Diversification And Bank Risk-taking

The banking industry is the main pillar of China's financial system.Bank risk-taking not only affects their own operating,also has impact on the stability of financial system.As China's banking industry continues to deepen reforms,managers' role in bank is more prominent.Both managerial defense and overconfidence theory have shown that in the company with separate ownership and management rights,manager has the impulse to diversify.With the marketization of China's finance,revenue diversification of banks in China has increased remarkable.The proportion of non-interest income to total bank income has increased year by year.Many scholars believe that the increase in non-interest income is closely related to the level of risk-taking of banks.Under such a circumstance,it's meaningful to calculate the managerial ability of Chinese banks and analyze the relationship between managerial ability,revenue diversification and risktaking.This paper took the 28 listed banks in China from 2006 to 2017 as a sample and used the SFA-Tobit method to calculate the bank managerial ability.And the relationship between managerial ability,revenue diversification and risk-taking was tested by fixed effect regression.The research results showed that managerial ability was significantly correlated with bank risktaking.However,this correlation was different between large state-owned bank,joint-stock banks and smaller listed city commercial banks and rural commercial banks.For large banks,managerial ability was significantly positively correlated with risk-taking.But the higher managerial ability of small banks,the lower risk-taking level they had which affected different risk appetite tendencies.Also revenue diversification was positively related to the bank's risk-taking.Managerial ability of local banks would inhibit the positive revenue of income diversification on bank risk-taking.This paper not only enriched the research content of managerial ability and bank risk commitment,but also had reference significance for the design of incentive and supervision mechanism of commercial bank management.