Commercial Bank Capital Adequacy Under The Supervision Of The Credit Crunch Effect

Capital adequacy rate has always been one of the most importantindexes in banking regulatory. Especially after the promulgation of NewBasel Accord and Management of Commercial Bank's Capital AdequacyRate in 2004, every commercial bank began to pay more attention to it.But nowadays, a lot of research has found that, although the improvementof capital adequacy rate can bring safety to banks, it also brings a sideeffect -loan crunch. This passage starts from some related theories onbanking regulatory and credit crunch, and then builds a panel regressionmodel using the data of Chinese 14 national commercial banks in 2003and 2004. It first quantitatively proves that the credit crunch causing bycapital adequacy requirement also exists in China and affords theoreticalbasis for our future banking regulatory. In the meanwhile, according tothe present situation of Chinese banking capital adequacy, this passagealso gives some suggestions such as implementing elastic, different levelregulatory system and drawing into foreign banks.