Research on the heterogeneity of domestic banks’ risk taking influenced by bank capital regulation based on DSGE model

Abstract

ABSTRACT This article deeply integrates the characteristics of the China financial market under the background of the spread of the global new coronavirus pneumonia epidemic and integrates the multi-sector DSGE model including heterogeneous residents, manufacturers, banks, and macro-prudential supervision, and then numerically simulates the impact of technology and financial shocks on major economic indicators. Macroprudential capital regulation can help stabilize large economic waves, increase labour supply in the economic system, and restrain excessive transmission of systemic risks in the financial system. Meanwhile, the leverage ratio of banks will also change correspondingly with the price fluctuations of the real estate market. The relevant decision-making departments of the central government and the financial supervision departments coordinated in many ways to find the optimal internal balance point and increase the combined effect of effectively deflating systemic risks.