Endogenous Risk Disciplining Effect Of Bank Franchise Value

According to the traditional bank risk management theory, because of the dominant (hidden) existence of the deposit insurance system, the bank will lower capital ratios to choose the investment portfolio with higher risk, so as to upgrade the ruin probability sharply. However, actually. Banks of all countries do not only meet the requirements of minimum capital adequacy, but also hold a certain amount of additional capital cushion. At the same time, the ruin probability of most banks is negligible. These bank behaviors, which are contradictory to the traditional theory, make the academic find and define the concept of bank franchise value. And based on this study, they research the risk constraint effect of bank franchise value.From the initiative risk management point of view, these study are not only very important for the academia to research bank franchise value, but also have a profound influence on the policy-making for the government regulators, and are beneficial to the stable operation and healthy development of the economy. Based on the special domestic financial development system, a mature foreign model is suitable for the analysis of China's banking franchise value risk constraint effect? What are the factors affecting bank franchise value directly or indirectly? Is there risk constraint effect of bank franchise value? Based on the issues above, this paper spread out study in theory and practice, and analyse comprehensively combined with empirical analysis.Using Tobin's Q measurement, this paper was based on multi-steps dynamic regression model to analyze the determinants and risk-disciplined effect of the charter value. The result indicates that the exogenous and endogenous charter value had a disciplining effect on risk-taking. And the results can be confirmed by the robustness checks.