Research On The Influence Of Economic Policy Uncertainty On The Liquidity Creation Of Commercial Banks

As an important financial intermediary in China,commercial banks are the key link between the policy authorities and the real economy.At the same time,liquidity creation is the main way for commercial banks to serve the real economy.Especially in the financial system dominated by indirect financing,the level of liquidity creation of commercial banks can reflect the ability of the financial system to serve the real economy.However,in recent years,the international and domestic economic situation has been constantly changing.The economic policy authorities have constantly adjusted their policies and measures to deal with the impact of emergencies such as the COVID-19 on the economy.Economic policy uncertainty has become the "normal" of economic development in recent years,which makes it difficult for commercial banks to judge the trend of economic policies,This makes it produce wrong expectations on policies and have a negative impact on the behavior of commercial banks,which will be transmitted to the real economy through the liquidity creation function of commercial banks.Based on the characteristics of China’s economic policy uncertainty environment and the situation of bank operation practice,this paper systematically collates domestic and foreign research on economic policy uncertainty,commercial banks’ liquidity creation,and commercial banks’ risk taking.Combined with existing research,this paper first makes a theoretical analysis of the impact of economic policy uncertainty on commercial banks’ liquidity creation and its mechanism of action,and puts forward theoretical assumptions.Then,through the Bank Focus database,the daily operating data of 149 commercial banks,which accounted for more than 90% of the total assets of national commercial banks from2013 to 2021,were collated as the research object.149 commercial banks mainly include large state-owned commercial banks,national joint-stock commercial banks,urban commercial banks,rural commercial banks,etc.,and constructed unbalanced panel data to empirically test the proposed theoretical assumptions,The purpose is to further explore whether the continuous adjustment of economic policies by the policy authorities will have a negative impact on the liquidity creation level of commercial banks and even the real economy,and through which channels the uncertainty of economic policies will affect the liquidity creation of commercial banks.At the same time,due to the large number of commercial banks in China,the impact of economic policy uncertainty on the liquidity creation of different types of commercial banks may be heterogeneous.Therefore,this paper tests the heterogeneity of commercial banks with different asset sizes,different capital adequacy ratios,and different business scopes,The final empirical analysis results show that:the increase of economic policy uncertainty will reduce the liquidity creation level of commercial banks;The impact of economic policy uncertainty on liquidity creation of commercial banks with different asset sizes,different capital adequacy ratios and different business scopes is heterogeneous,while the impact of economic policy uncertainty on liquidity creation of commercial banks with large scales,high capital adequacy ratios and national commercial banks is weak;There is an intermediary effect in the process of the impact of economic policy uncertainty on the liquidity creation of commercial banks.