Commercial Banks In China Research Articles

Research on the Coordination of Bank Capital Adequacy Ratio and Monetary Policy

Capital adequacy ratio and monetary policy are important control measures of financial supervisory authority and monetary authority, respectively. The effective coordination of the two has greatly affected the effectiveness of monetary policy. The article selects the annual data of 16 listed commercial banks in China from 2003 to 2018, and studies the impact of capital adequacy ratio on monetary policy transmission by constructor. listed commercial banks in China from 2003 to 2018, and studies the impact of capital adequacy ratio on monetary policy transmission by constructing a panel regression model. The results show that large state-owned commercial banks play a major role in bank credit channels for monetary policy, and banks with higher capital adequacy ratios are more likely to have a higher capital adequacy ratio. The results show that large state-owned commercial banks play a major role in bank credit channels for monetary policy, and banks with higher capital adequacy ratios are more vulnerable to monetary policy shocks. In addition, the external capital constraint of minimum capital adequacy will cause a multiplier effect when monetary policy is transmitted through credit channels. The multiplier effect produced by joint-stock commercial banks is much smaller than that of large state-owned banks. The multiplier effect produced by joint-stock commercial banks is much smaller than that of large state-owned banks. Therefore, financial supervisory departments must fully consider the interference caused by the capital adequacy ratio on monetary policy, strengthen policy coordination, and unblock the transmission mechanism of Therefore, financial supervision departments must fully consider the interference caused by the capital adequacy ratio on monetary policy, strengthen policy coordination, and unblock the transmission mechanism of monetary policy.

WACC Analysis of Banks: Take JPMorgan Chase and Industrial and Commercial Bank of China as Examples

The world’s overall economic level has improved, and the financial system has also been continuously improved. Among them, international banks have long become the backbone of the financial system. At the same time, various financial instruments such as WACC (Weight Average Cost of Capital) are constantly being applied to the management and investment direction of international banks. In the process of applying the WACC decision-making model to some international banks, some problems were encountered and solutions were proposed for reference. This also provided a reference for the further improvement of the financial system and the progress and development of the financial market. This article discusses the possible significant differences in the WACC capital structure decision-making model used by JPMorgan Chase and the Industrial and Commercial Bank of China and discusses the reasons for this difference. The use of the WACC capital structure decision-making model can enrich the application background to a certain extent and better guide investment.

Research and Analysis on the Development Strategy of Investment Banking Business of Commercial Banks in China

Against the backdrop of the growing financial industry, the development of investment banking has become an inevitable trend for commercial banks, and certain results have been achieved so far. However, in recent years, there are some issues regarding the development of investment banking business operations in commercial banks identified in the study, such as insufficient product innovation and insufficient business risk management capability. This paper analyzes the environment using the "PEST" analysis. Finally, the development direction is summarized by sorting out the development status, problems and reasons, enhancing innovation capabilities and borrowing the power of fintech can all provide good ideas for commercial banks to develop their investment banking business. This paper can provide ideas for other commercial banks facing the problem of developing investment banking business.

A Study of the Impact of ESG Investments on the Liquidity Risk of Commercial Banks

ESG investment promotes the high-quality development of China's economy, and at the same time brings risks and challenges to the market. there is a certain contradiction between the long-cycle nature of ESG investment and the liquidity of commercial banks. In this context, how to stimulate commercial banks to take the initiative to improve ESG investment, and how ESG investment will have an impact on the liquidity risk of commercial banks has become an urgent issue to be considered. This paper selects the annual panel data of 37 commercial banks in China from 2009 to 2022, empirically tests the theoretical research hypotheses, and empirically investigates the impact of ESG investment on the liquidity risk of commercial banks by using the dynamic panel system generalised moment estimation (GMM), finally, after the above theoretical analyses and empirical studies, this paper draws the following conclusions: from the medium and long term perspective , ESG investment reduces the liquidity risk of commercial banks. Based on this, it is recommended to improve the information disclosure system and rating system of ESG investment, to promote the benign development of ESG investment in the banking industry, and to facilitate the realisation of China's "dual-carbon" goal.

Analysis of the impact of the COVID-19 lockdown on financial technology (FinTech), interest rate liberalization (IRL) and commercial banks’ risk-taking: Chinese empirical evidence

ABSTRACT Financial Technology (FinTech), which drove changes in the financial business landscape during COVID-19 May 2001also contribute to Interest Rate Liberalization ( IRL ) and increase risk-taking by commercial banks. Therefore, it is important to analyse the impact of FinTech and IRL on risk-taking behaviour, and to examine whether the development of FinTech will hinder IRL. To analyse the complex relationship between FinTech and commercial banks under the COVID-19 lockdown, reduce the possibility of systemic risk outbreak in the banking industry, based on the data of 34 commercial banks in China from 2008 to 2022, this paper empirically tests the impact of FinTech and IRL on risk-taking of commercial bank under the COVID-19 lockdown. Under the impact of the COVID-19, IRL has pushed up the risk of commercial banks, which is not conducive to the stability of the asset-liability structure of commercial banks. Second, there is a U -shaped relationship between FinTech and risk-taking, that is, the risk-taking level is reduced at the beginning of the development of FinTech, and then increased. Third, under the impact of COVID-19, the development of FinTech has accelerated the process of IRL , intensified the price competition of commercial banks, and further pushed up the risk-taking levels.

A novel ensemble model of multi-class credit assessment based on multi-source fusion theory

With the development of artificial intelligence technology, the assessment method based on machine learning, especially the ensemble learning method, has attracted more and more attention in the field of credit assessment. However, most of the ensemble assessment models are complex in structure and costly in time for parameter tuning, few of them break through the limitations of lightweight, universal and efficient. This paper present a new ensemble model for personal credit assessment. First, considering the conflicts and differences among multiple sources of information, a new method is proposed to correct the category prior information by using the difference measure. Then, the revised prior information is fused with the current sample information with the help of Bayesian data fusion theory. The model can integrate the advantages of multiple benchmark classifiers to reduce the interference of uncertain information. To verify the effectiveness of the proposed model, several typical ensemble classification models are selected and empirically studied using real customer credit data from a commercial bank in China, and the results show that among various assessment criteria: the proposed model not only effectively improves the multi-class classification performance, but also outperforms other advanced multi-class classification credit assessment models in terms of parameter tuning and generalizability. This paper supports commercial banks and other financial institutions examination and approval work.

Assessing the effect of green credit on risk-taking of commercial banks in China: Further analysis on the two-way Granger causality

Green credit is a new financial instrument that has emerged in response to the call for the transformation of the “green economy" model. It aims to utilize financial means to support green industries and environmental projects, serving as a crucial lever for the integration of social and economic benefits. It also represents a significant developmental direction for the future credit business of banks. Leveraging microdata from 36 banks spanning the years 2007–2022, this study explores the correlation between green credit and the risk-taking behavior of commercial banks in China, building upon the DID model. Meanwhile, Granger causality tests are employed to investigate the bidirectional relationship between these two core objects. The research results indicate that green credit has a short-term mitigating effect on the risk-taking behavior of commercial banks. This risk-mitigating effect is more pronounced among banks with smaller assets and lower profitability. However, this effect diminishes over time, ultimately resulting in an increased propensity for risk-taking in the long run. Moreover, this highlight posits that the credit risks of banks do not influence the implementation of green credit policies. Consequently, this paper offers essential reference value for the risk management practices of commercial banks in the emerging economies and other global countries.

Analysis of the Impact of ESG Performance on Financial Market Stability Based on Multivariate Statistical Modeling Perspective

Abstract ESG performance reflects corporate social responsibility, while financial market stability shows the dynamic changes of enterprises, and exploring the relationship between the two is of great significance to optimize the structure of financial market stability. In this paper, on the basis of combining the mechanisms of ESG performance and financial market stability, brand value is introduced as a mediating effect to analyze the mechanism of ESG performance on financial market stability and relevant research hypotheses are designed. The appropriate research model is established with 30 commercial banks in China as the research object through the use of a multiple linear regression model with weighted least squares estimation for parameter estimation. For the impact of ESG performance on financial market stability, empirical analysis is carried out using benchmark regression, mediation effect test, heterogeneity test, and robustness test. Every 1% increase in the ESG composite score of financial institutions increases financial market stability by 0.179%, and only the social dimension of ESG performance is significant for financial market stability. High-cost and small-sized financial institutions are more capable of lowering financial market risk, and the difference in the Beta value of ESG performance of financial institutions between the highest and lowest groups is 1.067, which is significant at the 1% level. Financial enterprises need to pay full attention to the contribution of ESG performance to the stability of the financial market in order to support the enhancement of their economic efficiency and the maintenance of stable and healthy development of the market.

Exploring the Nexus of Corporate Social Responsibility, Innovation Capability, and Organizational Performance: Evidence from Rural Commercial Banks in China

This study investigates the impact of corporate social responsibility (CSR) on innovation capability and organizational performance in China's rural commercial banks. Utilizing a robust evaluation index system, the research quantitatively assesses CSR and its dimensions: economic, legal, moral, and charitable responsibilities. Findings indicate that CSR positively influences organizational performance and innovation capability. Moreover, innovation capability significantly enhances organizational performance and partially mediates the relationship between CSR and organizational performance. The research also highlights the moderating role of an organizational innovation atmosphere, where colleague support, supervisor support, and organizational support strengthen the relationship between innovation capability and organizational performance. These insights underscore the critical role of CSR in driving innovation and organizational success in the rural banking sector. Further research is recommended to explore additional mediating mechanisms and broaden the sample scope for more comprehensive results.

我国上市商业银行信用风险度量研究——基于KMV模型

我国上市商业银行信用风险度量研究——基于KMV模型

Research on the impact of digital transformation on the systemic risk of banks

Taking 26 listed commercial banks in China from 2010 to 2021 as a research sample, this paper empirically analyzes the impact and mechanism of digital transformation on bank systemic risk. The results show that digital transformation significantly reduces the systemic risk of banks, and the mechanism analysis finds that digital transformation inhibits the systemic risk of banks through two major channels: improving the operational efficiency of banks and reducing bank risk-taking. The results of heterogeneity analysis show that the digital transformation of small and medium-sized banks has a more significant inhibitory effect on the systemic risk of banks. This study provides a reference for better driving the digital transformation of banks and preventing systemic risks in the banking industry.

An Exploration of the Risk Management of Financial Derivatives in Chinese Commercial Banks

Financial derivatives are products based on the innovation of financial products, which can be used for risk avoidance, investment management, etc. In recent years, with the rapid development of the financial market, the development of financial derivatives has become more and more diversified in Chinese commercial banks, ushering in new development opportunities. This paper introduces financial derivatives, discusses the risk management of financial derivatives in Chinese commercial banks, and compares the financial derivatives of commercial banks in China with those in the United States. According to the analysis, it can be concluded that the existing problems in risk management include the lack of rational consumers in China's financial trading market, the unregulated market system, the high risk of purchasing financial derivatives products, and the internal management problems of Chinese banks. In view of these problems, three effective methods are proposed for optimization, namely strengthening the training of human resources, establishing a sound financial regulatory system, and enhancing the internal management of banks.

Does cycle superposition amplify bank liquidity risk under different levels of financial openness? Empirical evidence from China

PurposeThis paper aims to explore the impact of cycle superposition on bank liquidity risk under different levels of financial openness so that banks can better manage their liquidity risk. Meanwhile, it can also provide some ideas for banks in other emerging economies to better cope with the shocks of the global financial cycle.Design/methodology/approachEmploying the monthly data of 16 commercial banks in China from 2005 to 2021 and based on the time-varying parameter vector autoregressive model with stochastic volatility (TVP-SV-VAR) model, the authors first examine whether the cycle superposition can magnify the impact of China's financial cycle on bank liquidity risk. Subsequently, the authors investigate the impact of different levels of financial openness on cycle superposition amplification. Finally, the shock of the financial cycle of the world's major economies on the liquidity risk of Chinese banks is also empirically analyzed.FindingsCycle superposition can magnify the impact of China's financial cycle on bank liquidity risk. However, there are significant differences under different levels of financial openness. Compared with low financial openness, in the period of high financial openness, the magnifying effect of cycle superposition is strengthened in the short term but obviously weakened in the long run. In addition, the authors' findings also demonstrate that although the United States is the main shock country, the influence of other developed economies, such as Japan and Eurozone countries, cannot be ignored.Originality/valueFirstly, the cycle superposition index is constructed. Secondly, the authors supplement the literature by providing evidence that the association between cycle superposition and bank liquidity risk also depends on financial openness. Finally, the dominant countries of the global financial cycle have been rejudged.

Research on the E-commerce Platform Marketing Strategy Based on the Relevant Bank E-commerce Platforms in China

With the development of the Internet, science, and technology, the Internet has penetrated all aspects of the national economy. The amazing sales of "Double Eleven" in 2012 tell the world that in the era of e-commerce, every day is a shopping carnival. E-commerce giants rely on e-commerce platforms to launch an impact on banks, banks in the opposite direction but also started e-commerce. Research methods Single case study method was used. Taking the e-commerce platforms Shanrong Commerce and Global E-Trade Service built by China Construction Bank and Industrial and Commercial Bank of China as examples, this paper analyzes the marketing strategies of their e-commerce platforms, online and offline user transformation, customer relationship platform construction, and other marketing links. And evaluate its marketing model, and analyze its advantages and disadvantages. Through the case analysis of Shanrong commerce and Global E-Trade Service, the paper gives suggestions on the network marketing mode of the bank e-commerce platform, which has certain reference significance for the current bank e-commerce network marketing.

Can the green finance reform and innovation pilot policy promote green technology innovation?—a novelty evidence from both polluting companies and city commercial banks in China

Can the green finance reform and innovation pilot policy promote green technology innovation?—a novelty evidence from both polluting companies and city commercial banks in China

Evaluating the impact of uncertainty and risk on the operational efficiency of credit business of commercial banks in China based on dynamic network DEA and Malmquist Index Model

There's a lot of uncertainty in the global financial system due to trade, political, and unforeseen issues. There are dangers and uncertainties in China's domestic financial market due to the ongoing effect of the global economic climate and the impact of the new coronavirus pandemic. Nonetheless, the conventional financial sector, which is controlled by commercial banks, continues to have a dominant position in China's financial system, with the traditional credit business model serving as its primary business model. As a result, the primary subject of this essay is commercial banks, a common kind of financial organization. The combination of the Malmquist Index Model with the new network DEA model takes into account the real circumstances faced by Chinese commercial banks. The three phases of the credit business operation process of commercial banks are capital buildup, loan issuing, and profit generation. To observe the effects of recent domestic market uncertainties and the high risk of emergencies like the epidemic on traditional financial institutions dominated by banks, this paper measures the efficiency of credit business of 26 listed banks in China from 2016 to 2022 and analyzes the operational efficiency of credit business of Chinese commercial banks from both static and dynamic perspectives. As a result, Chinese commercial banks and other established financial institutions are better equipped to reduce risks and uncertainties and support the steady growth of the country's financial sector.

The Impact of Macroeconomic Factors on Non-Performing Loans of Commercial Banks: An Empirical Study Based on 2022 Provincial-level Data in China

The level of macroeconomic development varies, resulting in different non-performing loan ratios for commercial banks. Based on the relevant data of macroeconomic indicators from 31 provinces and cities in China in 2022, this paper empirically studies the relationship between regional gross domestic product (GDP), average urban employment salaries, the proportion of the tertiary industry, per capita consumer expenditure, the number of recipients of unemployment insurance, and the number of recipients of old-age insurance, and the non-performing loan ratio using a multiple regression model. A general model is established and tested to determine the final model. The empirical research results indicate that the proportion of the tertiary industry and the number of recipients of unemployment insurance have a positive impact on non-performing loans, while average urban employment salaries, regional GDP, and the non-performing loan ratio have a negative impact. Finally, based on the conclusions drawn from this study, relevant policy recommendations are proposed to provide guidance for commercial banks in China to mitigate the risks of non-performing loans.

Research on Credit Risk Contagion of Commercial Banks Based on Copula Model

Research on the credit risk contagion effect of commercial banks is a key issue in credit risk management of commercial banks. This paper constructs a measurement framework for the credit risk contagion effect of commercial banks based on the Copula function theory. On the basis of selecting the appropriate Copula function and measuring specific parameters, taking Bank of China and Industrial and Commercial Bank of China as examples, the tail correlation coefficient was used to measure the credit risk contagion effect of the two banks, and relevant conclusions were drawn.

Interest rate risk of Chinese commercial banks based on the GARCH-EVT model

Interest rate market risk faced by China’s commercial banks is increasing after the announcement that the interest rate marketisation is completed. This paper examines the Value-at-Risk, and statistical properties in the daily price return of Shanghai banks’ overnight offered rate. The study applies two-stage approaches, combining GARCH-type models with extreme value theory. Firstly, the Markov regime switching model is used to test the regime states of the series. Secondly, the performance of different VaR models are examined. Results show that the extreme value approach estimates better at the 99% confidence level. The EGARCH-GED model is the most suitable of the employed GARCH-type models. The back-testing results support the idea that the approach used in this study is appropriate for improving commercial banks’ daily risk management. This paper applies the GARCH-EVT method for interest rate measurement after China’s interest rate marketisation and added regime analysis of interest rate. Suggested policy implications will help formulate policies that guide the activities of commercial banks in China.

Heterogeneous Impact of Fintech on the Profitability of Commercial Banks: Competition and Spillover Effects

Using annual panel data of 46 listed commercial banks in China from 2012 to 2021 and constructing a two-way fixed-effects model, this study empirically analyzed the competition and technology spillover effects of fintech on the profitability of commercial banks. The results showed the following: (1) In the early stages of fintech development, the competition effect was larger than the technology spillover effect; thus, it was negatively correlated with commercial banks’ profitability. However, with the spread of innovative fintech, technology spillover effects and commercial bank profitability will gradually improve. (2) The influence of fintech on the profitability of commercial banks differed. Compared with large commercial banks, fintech had more significant negative effects on small- and medium-sized commercial banks in the short run. However, the role of fintech for such banks will also grow in the future. The results of this study provide practical guidance for how commercial banks can respond to the fintech wave. To realize the sustainable development of the banking industry, commercial banks should change their business philosophy and revenue model, vigorously improve their fintech innovation capability, differentiate their choice of fintech development routes, develop personalized customization with a focus on users, and ultimately realize digital transformation and upgrading.