The Measurement Of Chinese Commercial Banks' Liquidity And Its Influential Factors Analysis

Liquidity, safety and profitability are the three targets in commercial bank management. Among the three characteristics, liquidity is the life-line of commercial bank. However, as the insufficient of the data in the banking field, there's no unified indicator to reflect the liquidity level of commercial banks up to now. In addition, the vast majority of domestic researches are from the point of macro perspective other than micro perspective. In this essay, we will study the measurement and influential factors of commercial banks from the view of micro perspective.In the part of theoretical analysis, we analyzed the definition of the liquidity of commercial bank and the various indicators of liquidity. In the part of empirical analysis, we measure the level of commercial bank's liquidity and analyze the influential factors.In measuring the level of commercial bank's liquidity, we use the public data with the method of principal components analysis to construct an index F to reflect the level of the liquidity of commercial banks. The index F has passed through the reasonable test. Then, using the index F, we measured the level of liquidity of nearly 100 commercial banks in each year during the period from 1998 to 2008. We also analyzed the impact of assets size and whether being listed has something to do with the liquidity level. We concluded that:first, the commercial banks with different asset size do have different liquidity level obviously; second, whether being listed has no obvious impact on the level of liquidity of commercial banks, and in some situation, the impact is negative.In analyzing the influential factors, we firstly analyze the internal and external factors, and then we use panel data model to analyze the influential factors to the China's 14 listed banks during the period 2000 to 2008. We concluded that:first, the internal factors make a stronger impact on the commercial bank's liquidity; second, Liquidity and profitability can have positive relationship under certain conditions.Finally, based on the conclusions we arrived, we put forward some suggestions.