Research On The Influence Of Diversification Of Income Structure On The Risk Of Commercial Banks In China

With the rapid development of financial liberalization and the country’s gradual reform of deposit and loan interest rates,the traditional business model based only on interest spread income has become unsustainable.Commercial banks are paying more and more attention to the development of non-interest business,and their income structure is more and more diversified.In recent years,the macro environment is becoming more complex and commercial banks have also made efforts to diversify their operations to realize the transformation and upgrading of banks.In this context,it is very important to study the impact of income structure diversification on the risk of commercial banks.In the meanwhile,commercial banks of different sizes are affected by economies of scale and scope,and the impact of diversification of their income structure on risks may not be consistent.Therefore,this paper uses panel regression to study the specific impact of current diversified income structure on bank risk,and the threshold regression model is used to study the different influences of the diversification of the income structure of banks of different scales on the risks of commercial banks through taking the bank asset scale as the threshold value on this basis.The empirical results show that,in general,the diversification of the income structure of commercial banks can reduce the bankruptcy risk and credit risk of banks,and improve the risk-adjusted return rate of banks.The larger the scale,the better the diversification effect of bankruptcy risk and the effect of obtaining risk-adjusted returns.The reduction in credit risk was most pronounced for small banks.Based on this,this paper puts forward the following suggestions:(1)Reasonably adjust the income structure according to its own scale(2)Moderately expand diversified operations,taking into account business innovation and risk management(3)Strengthen risk management and supervision measures,and take into account the policy orientation of encouraging innovation.