The Influence Of Financial Regulation On The Liquidity Creation Of Commercial Banks

Since 2014,regulatory authorities have stipulated liquidity coverage ratio and other indicators as liquidity risk supervision indicators to gradually improve the effect of liquidity supervision.As a result,China has formed four financial regulatory tools,including dynamic capital and liquidity.Among them,capital supervision and liquidity supervision tools are the key financial supervision tools.However,the regulatory requirements set by these two financial regulatory instruments will form multiple institutional constraints on bank capital and liquidity to a certain extent,thus affecting the liquidity creation of commercial banks.Bank liquidity creation is an important social function of commercial banks as financial intermediaries.Therefore,examining the influence mechanism of capital regulation and liquidity regulation on liquidity creation of commercial banks is helpful to optimize financial supervision means and effectively promote supervision.This paper firstly analyzes the influence mechanism of financial regulation on liquidity creation of commercial banks from the theoretical level,clarifies the measurement methods of liquidity creation of commercial banks at home and abroad,and then leads to the measurement methods of liquidity creation of this paper,and analyzes the development trend and current situation of liquidity creation of various commercial banks from the trend.Then,this paper selects the micro data of 59 commercial banks in China from 2014 to 2021,draws on the cat-nonfat method of subject liquidity division by Berger and Bouwman(2009),and constructs the subject liquidity division table reasonably based on the experience of Chinese scholars in selecting liquidity creation indicators in recent years.Calculate our country commercial bank liquidity creation.Through random effects model and other models,we conduct panel regression on liquidity creation per unit asset and capital regulation and liquidity regulation.Through empirical research,the role of capital regulation and liquidity regulation on liquidity creation of commercial banks is deeply studied.First,we empirically analyze the separate effects of the two regulatory instruments on the liquidity creation of commercial banks;Second,we analyze the combined impact of the two regulatory instruments on bank liquidity creation;Third,we analyze the heterogeneity of the impact of the two regulatory instruments on liquidity creation of banks with different asset sizes.This paper draws the following conclusions:(1)Both capital regulation and liquidity regulation can promote the liquidity creation of the whole sample banks.For national banks,capital regulation promotes their liquidity creation,while liquidity regulation inhibits their liquidity creation.For regional banks,both capital regulation and liquidity regulation promote liquidity creation.(2)The impact of capital regulation on liquidity creation of commercial banks in China is greater than that of liquidity regulation,and the impact is more significant.(3)Compared with national banks,capital regulation and liquidity regulation have a more significant impact on the liquidity creation of regional banks,and these two financial regulatory instruments have a greater impact on the liquidity creation of regional banks,especially capital regulation.According to the empirical results,the paper finally puts forward some policy recommendations:(1)Formulate capital regulation policy prudently and pay attention to capital Differences in the impact of this regulation;(2)Pay attention to the heterogeneity of the impact of liquidity regulation and formulate policies at different levels;(3)Optimize the financial regulatory structure and establish a new regulatory framework;(4)Providing policy support to regional banks to replenish capital and liquidity;(5)Establish a real-time feedback mechanism for regulatory effect and dynamically adjust regulatory schemes.