Research On The Impact Of Capital Buffers Of Chinese Commercial Banks On Credit Behavior

In 2008,the financial crisis spread across the globe,triggering a large-scale economic recession,increasing financial instability,and a strong procyclicality in the banking system.Based on this,the Basel Banking on Supervision Committee(hereinafter referred to as BCBS)has weakened the impact of the procyclicality of the banking system on economic fluctuations,and has established a counter-cyclical capital supervision system by formulating the Basel III(hereinafter referred to as Basel III),Countercyclical capital buffer and a series of related regulatory requirements.The proposal of the "Capital Management Measures for Commercial Banks(Trial)" in 2013 marked that China has begun to explore macro-prudential counter-cyclical supervision.The regulatory authorities introduced a macro-prudential framework of counter-cyclical supervision to improve China’s capital supervision system,gradually increase the effectiveness of supervision,and control the capital buffer of commercial banks to ensure the effectiveness of capital supervision.However,due to practical considerations,banks’ actual capital adequacy ratios are often higher than the minimum levels set out in regulatory requirements,there is always a certain amount of capital buffer in the operation of Chinese banks.Therefore,it is explored whether the fluctuation of banking credit is related to the adjustment of the capital buffer,whether the adjustment of the capital buffer will affect the credit behavior of China’s commercial banks with the periodic fluctuations of the economy,and the channels through which the capital buffer affects banks credit needs to be further explored.Based on the above considerations,the paper makes the following arrangements:First,based on the official interpretation and authoritative scholar’s point of view,the paper proposes the definition of the capital buffer of a commercial bank,and analyzes the reasons for the bank’s holding of the capital buffer.Secondly,by reviewing a large amount of data,this paper sorts out the relevant regulations on capital buffers promulgated in China over the years,and intuitively explains the development of China’s capital buffer in recent years by constructing statistical charts.In addition,the paper combines the knowledge learned and previous research results to analyze the mechanism of the impact of capital buffer on bank credit behavior under different economic conditions,and explore the impact path of bank credit behavior based on direct and indirect perspectives.Finally,based on the above analysis,considering that China’s commercial banks were listed after the exchange rate reform in 2005,the disclosure data of each bank is relatively complete.The paper selecting the annual non-equilibrium panel data of 28 commercial banks from2005 to 2018 to construct a “capital buffer—credit behavior” model and using a two-step system GMM approach to study the issue of “how the capital buffer affected the credit behavior of Chinese commercial banks”,and verifies the effectiveness of the impact channel.According to the research results of this article,the following conclusions are drawn:(1)The credit behavior of commercial banks is counter-cyclical.During the economic prosperity period,the credit growth rate continues to slow down;during the economic contraction period,the credit growth rate will increase instead.(2)The capital buffer of commercial banks runs counter to the fluctuation direction of credit growth.The counter-cyclical adjustment of the capital buffer strengthens the counter-cyclicality of bank credit behavior,and the regulatory policy has achieved the expected effect of suppressing excessive economic fluctuations.(3)In the context of counter-cyclical capital supervision,credit growth is significantly negatively correlated with bank size and loan-to-loan ratio.Banks of different asset sizes have significant differences in risk-oriented business strategies.However,under different economic cycles,banks ’ business activities have a direct impact on the credit market through tightening and investment of funds.(4)This article verifies that the chain growth rate of capital buffer can use the conduction effect of monetary policy to influence the bank’s credit behavior through the two channels of "bank capital channel" and "bank credit channel" under different economic cycle conditions..In the capital channel,the interactive item of deposit interest rate and capital buffer is significantly negatively correlated with credit growth;in the credit channel,the interactive item of deposit reserve rate and capital buffer is significantly positively correlated with credit growth,indicating that both of the above channels It can have an impact on the credit behavior of Chinese commercial banks.