Research On The Influence Of Foreign Equity Participation On The Risk Of China’s Listed Commercial Banks

Since 2018,China has gradually removed the shareholding limit for foreign institutions in Chinese financial enterprises.This series of signals shows China’s firm determination to maintain and intensify opening-up.Foreign shareholders’ participation in Chinese banks,on the one hand,can improve the risk management level of banks to a certain extent and reduce the risks of banks,but on the other hand,it increases the complexity of regulators’ supervision and risk prevention.Banks play an important role in China’s financial system,and the instability of the banking system will lead to the instability of the whole financial system.Therefore,it is of great significance to study the influence of foreign equity participation on bank risk.This paper combed the introduction of foreign capital impact on bank risk,the introduction of foreign investment on bank performance of domestic and foreign literature,to foreign shareholders and definition of the concept of bank risk in detail,based on the related theory analysis of foreign-shared impact on bank risk and bank total assets scale,bank deposit and lending rate,the adjustment of the economic growth effect.Next,it analyzes the current situation of foreign equity participation in China’s listed commercial banks and the current situation of bank risks.Then,it selects unbalanced panel data of 37 Chinese listed commercial banks from 2007 to 2020 to empirically analyze the impact of foreign equity participation on bank risks and test the moderating effect.To test the heterogeneity effect,the banks were grouped according to different business regions by regression.The results show that :(1)foreign equity participation can reduce the risk level of Chinese banks;(2)The higher the shareholding ratio of foreign shareholders,the lower the risk of banks;(3)Through the test of the moderating effect,it is found that the total assets scale,the ratio of deposits and loans,and the economic growth rate all have significant moderating effects.Among them,the total asset scale has a negative moderating effect,the smaller the total asset scale,the stronger the negative correlation between foreign ownership ratio and the risk of commercial banks;The ratio of deposits and loans has a positive moderating effect.The higher the ratio of deposits and loans,the stronger the negative correlation between foreign ownership ratio and the risk of commercial banks.The economic growth rate has a negative moderating effect.The lower the economic growth rate is,the stronger the negative correlation between the foreign ownership ratio and the risk of commercial banks.(4)There is heterogeneity in the risk of foreign equity participation for different types of banks: there is no significant relationship between foreign equity participation and the risk of national commercial banks,but a significant relationship between foreign equity participation and the risk of regional commercial banks.