The Research On The Influence From Bank Credit To Real Estate Prices Based On Counter-cyclical Capital Constraint

The issue of real estate price is a hot topic of social concern. This article concerns the influence on the size of bank loans by bank’s counter-cyclical capital constraints, and the resulting impact on real estate price. Changing the size of bank loans through the impact of loans and real estate market supply and demand and market liquidity to affect the real estate price. The change of the size of bank loans is of pro-cyclical which is affected by the minimum capital adequacy requirements of " International Convergence of Capital Measurement and Capital Standards:A Revised Framework "and bank’s internal credit rating methodologies and the impact of external market demand for loans.Implementation of counter-cyclical capital constraints not only play significant role on the pro-cyclical effect of "International Convergence of Capital Measurement and Capital Standards:A Revised Framework", It’s also important to prevent systemic financial risk. This paper transforms the capital adequacy ratio formula by introducing counter-cyclical mitigation coefficient and analyzes it’s function on the capital constraints of bank. Implementation of counter-cyclical bank capital constraints affect the size of bank loans, thereby affects the real estate price.The empirical results show that counter-cyclical mitigation coefficient significantly and stably affect the real estate price. Impulse response functions and Variance decomposition show that there is positive and stable contribution between bank credit and real estate prices in the vector error correction model. Based on these results, we test the influence of counter-cyclical mitigation coefficient on real estate price. The results show that when real estate price is high, the counter-cyclical mitigation coefficient could slow it down, and vice versa. The absolute value impact of counter-cyclical mitigation coefficient on the real estate price range is from0to4percentage points, and its effect is stable. This influencing extent is practicable for current real estate price.Based on the above research, this article put forward several recommendations on the real estate market regulation. The first is to establish and improve the counter-cyclical regulatory mechanism. The second is optimize the banking sectoe rating method of loans. The third is to pay attention to adjustment of credit structure.