An Empirical Research On The Impact Of Capital Adequacy Regulation On The Performance Of Commercial Bank In China

Since 70s in the 20th century, bank capital adequacy regulation was always a hot subject. The global financial crisis caused many large well-known foreign financial institutions collapse, which made people pay more attention about this issue. However, over-regulation and not fully open financial market was the critical reason for China to avoid this financial crisis. So it made some practical sense to study on the capital adequacy regulation's impact on the performance of commercial banks after the crisis.This paper first summarized several literatures about the capital adequacy regulation's impact on the performance of commercial banks, and found there is no consensus about this issue worldwide. Then the paper use theories and build models to analysis which relevant to the capital adequacy regulation and the performance of commercial banks, together with the capital adequacy regulation and bank performance's current situation, a sample consists of data about China's 14 listed banks from 2006 to 2008.After that the paper focused on how the capital adequacy regulation influenced commercial banks'performance in China after a period time of the implement of the "capital adequacy ratio of commercial bank management measures". The results showed that the capital adequacy ratio has no noticeable effect on Listed Banks'performance. What's more, several other factors also influence their performance, such as risk management, asset quality, capital structure, management capability and management construction. By using dummy variables to consider 2008 financial crisis, the factors had a significant negative effect on the bank's performance, and the distinction between different types of banks did nothing to the results of the regression model. Finally, some conclusions and several recommendations are made.