The Research Of The Impact Of Foreign Banks’ Entry On The Risk-taking Of Domestic Commercial Banks

In order to promote high-quality social and economic development and build a new development pattern in an all-round way,China continues to push forward the process of deepening financial reform and promoting financial opening-up.As an important front for the comprehensive reform and further opening up of the financial service industry,the banking industry is constantly relaxing the market access conditions and business restrictions of foreign banks,gradually expanding their business scope and fields in China,and their influence on domestic commercial banks may continue to increase.Existing studies show that foreign banks entering and carrying out financial activities in the host country on the one hand will increase the supply of capital factors and promote the systematic stability of the host country’s banking industry,but on the other hand,it also provides channels for the transmission of external financial risks and intensifies the vulnerability of the banking system.Therefore,in the context of accelerating financial opening up,it is of great significance to explore whether the entry of foreign banks will have an impact on the risk taking level of domestic commercial banks,as well as the direction,degree and mechanism of impact,for steadily promoting financial opening up,keeping away and mitigating systematic risks,and helping to promote the healthy development of the banking industry.This paper makes an analysis of the development status and current situation of foreign banks in China at the outset.Secondly,it integrates and sorts the transmission mechanism of foreign banks’ influence on domestic commercial banks’ risk taking,and comes up with a series of hypotheses on the basis of related theory.Then,it tests the hypotheses one by one through the mediation effect model.Conclusion are as follows:(1)There is an inverted U-shaped relationship between the entry of foreign banks and the risk-taking level of domestic commercial banks;(2)Bank competition plays an intermediary role in the infiltration and influence of foreign banks on the risk taking mechanism of domestic commercial banks;(3)There is heterogeneity in the influence of foreign bank entry on risk taking of different types of banks.According to the above research results,this paper offers some recommendations with reference value:(1)continue to promote the reform and opening up of the financial industry,deepen the level of cooperation with foreign banks;(2)Improve relevant financial regulatory policies and enhance risk monitoring,prevention and resolution capabilities;(3)Domestic commercial banks need to make concerted efforts to improve their competitiveness constantly.The possible innovation of this paper lies in the dynamic analysis of the entry of foreign banks and the change of risk taking level of domestic commercial banks under the background of financial opening from the intermediary perspective of bank competition,which makes up for the lack of path and mechanism analysis of existing relevant literature research results.In addition,heterogeneity analysis is made on the influence of entry of foreign banks on state-owned commercial banks,joint-stock commercial banks,urban commercial banks and rural commercial banks by sample subdivision to make the research results more systematic.