Research On The Influence Of Market Competition On Bank Risk Of Commercial Banks In China

Under the trend of market-oriented financial reform and development,commercial banks are facing increasingly fierce market competition.As an important external environment of the banking industry,market competition affects the profit margin and operating behavior of commercial banks,and it is bound to be related to bank’s risk level.At the same time,non-deposit liabilities have been favored by banks in recent years,and their proportion in the total bank liabilities has gradually increased.Therefore,the main question studied in this paper is how the market competition of commercial banks in China will affect the bank risk?What role does non-deposit liabilities play?Will the competition in the banking market affect the bank risk through the non-deposit liability channel on the debt side?At present,there are few relevant literatures and the research conclusions are not consistent.Firstly,this article defines,measures and analyzes the current situation of bank market competition and non-deposit liabilities respectively.Secondly,according to the existing theory and reality,research hypothesis are put forward,and based on the unbalanced panel data of 100 commercial banks in China from 2009 to 2019,the fixed effect model and intermediary effect test method are used to carry out empirical research and robustness test on the correlation and channels.Finally,this paper summarizes the research conclusions and puts forwards relevant suggestions.The empirical results show that bank market competition increases the bank risk level and the proportion of non-deposit liabilities.Non-deposit liabilities play an intermediary role in the relationship between bank market competition and bank risk.It is one of the channels through which bank market competition affects bank risk.Further analysis shows that the impact of market competition on non-deposit liabilities and risk level of non-state-owned banks and banks with low capital adequacy ratio is more obvious,but there is an intermediary effect of non-deposit liabilities on the debt side.Based on the existing theories and research conclusions,this article proposes corresponding policy recommendations from the perspective of regulatory authorities and commercial banks,in order to reasonably guide the competitive behavior of banks,improve the bank’s balance sheet management ability and effectively prevent bank risks.