Research On The Impact Of Cross-border Capital Flows On Bank Risk-taking

Capital account liberalization is the only way for the construction of financial markets,but before the full liberalization of capital markets,it is necessary to clarify the impact of cross-border capital flows on financial markets.Historical experience shows that cross-border capital flows have a growth effect,that is,cross-border capital flows can improve the efficiency of international capital allocation and promote the prosperity and development of national market economic systems.However,at the same time,cross-border capital flows also have a risk effect.Capital ’s ’ big in and big out ’ will lead to increased vulnerability of the financial system,which may lead to cross-border contagion of financial risks.Considering that banks are an important sector of China ’s financial system,we should pay full attention to the impact of cross-border capital flows on the banking industry.Based on the background of capital account liberalization,this paper reviews the current situation of cross-border capital flows and bank risk-taking in China.Based on the relevant basic theories and domestic and foreign research results,this paper analyzes the causal relationship and transmission channels between cross-border capital flows and bank risk-taking,and further discusses the moderating effect of the " double pillar " policy on the relationship between the two.On this basis,this paper selects 288 commercial banks in China from 2010 to2020 as samples for empirical research.Finally,this paper puts forward relevant measures and suggestions based on the research conclusions.The main conclusions of this paper are summarized as follows :(1)the increase of cross-border capital flows will significantly enhance the level of bank risk-taking;and the impact exists only in urban rural commercial Banks,and in state-owned Banks and joint-stock Banks is not obvious.(2)After distinguishing the channels of cross-border capital flows,it is found that the impact of cross-border capital flows on bank risk-taking is mainly from other investment channels of cross-border capital,while the impact of direct investment and portfolio investment channels on bank risk-taking is not obvious.(3)Liquidity mismatch and capital structure are the intermediary transmission channels through which cross-border capital flows affect bank risk-taking,that is,cross-border capital flows will increase the level of bank risk-taking by exacerbating the degree of liquidity mismatch and deteriorating bank capital structure.(4)The ’ double-pillar ’ policy can adjust the impact of cross-border capital flows on bank risk-taking.On the one hand,both loose monetary policy and tight macro-prudential policy can alleviate the risk effect of cross-border capital flows.On the other hand,the combination of macro-prudential policy and monetary policy is more conducive to controlling the risk effect of cross-border capital flows than using a single policy.The research results of this paper will have certain reference value for moderately and orderly opening of China ’s capital account and reducing banking risks.