Research On The Impact Of Competition Of Deposit And Loan Market On Bank Risk-taking

With the deepening trend of financial globalization and economic integration, the competition situation of deposit and loan market in China has been changing all the time. And the changing competition situation of banking market is influential on bank risk-taking. So the study on the competition situation of China deposit market and loan market and their impacts on bank risk-taking has important significance.This paper combines theoretical analysis and empirical analysis. The first chapter is introduction, including research background and significance of the paper. In this chapter, we also review the relevant domestic and foreign researches and introduce the analysis method of this paper. The second chapter is the theoretical analysis. This part defines the content and methods of measurement of bank risk-taking and franchise value, describes the internal and external factors that affect bank risk-taking and analyzes the mechanism of the franchise value and capital constraint to the bank risk-taking under different level of competition, which lays the foundation for the empirical analysis. And then,it is the construction of theoretical model. We modify the competition model of deposit market and analyze the mechanism of the competition of deposit market to bank risk-taking. And then we build the competition model of loan market and discuss the mechanism of different competition extent of loan market to bank risk-taking. The forth chapter is empirical analysis. We firstly use conjectural variation model to calculate the competition extent of China's banking industry from 2002 to 2010 and then use the data of China's 11 banks to do the multiple regression analysis and co-integration test to verify the theoretical hypothesis in the theoretical derivation part. The last part of the paper is the conclusion and suggestion according to the theoretical and empirical analysis.The creative jobs of this paper are as follows,First of all, this paper introduces the variation of bank capital in the theoretical part and analyzes the effect ofbank competition to its risk-taking under the capital constraint, which lays the theoretical foundation for the empirical test.Secondly, this paper modifies the basic competition model of deposit market and then sets the competition modal of deposit market and loan market and analyzes the effect of the competitive extent of deposit market and loan market to the bank risk-taking, and gets the relative theoretical hypothesis. Furthermore, this paper uses the data of bank industry to do the empirical test and calculate the competitive extent of the deposit and loan market of China's banking industry, which could test the theoretical hypothesis.