Research On The Competence Of Commercial Banks And The Shifting Problem Of Reserve Tax

The interest rate paid by PBOC to the statutory deposit reserve of savings banks(commercial banks mainly) is only1.62%, which is far less than the benchmark one-year lending rate of commercial banks, and therefore, the deposit reserve has constituted the opportunity cost which cannot be ignored by commercial banks. In that sense, for the commercial banks, deposit reserve can also be called reserve tax. It is of profound and far-reaching realistic significance to make sure whether commercial banks of China have bear the reserve tax and to what extent that they can shift it, not only for savers and lenders, but also for the banks themselves (shareholders).First, this thesis defines the concept of commercial bank competiveness, and from that angle, analyzes the mechanism on how the competiveness of commercial banks affects the shifting of reserve tax. Second, this thesis makes clear the selection principles of the evaluation indicators of commercial bank competiveness, based on that,11evaluation indicators including risk, profitability, liquidity and market occupancy ability are selected. Through those indicators, this thesis uses the method of principal component analysis to rank the competiveness of the16domestic listed commercial banks. Finally, this thesis adopts the event study method to establish a regression model for the sequence of events, and carries on the empirical analysis to test the hypothesis.Research shows that in China, the rise of the statutory deposit reserve rate will have a marked negative impact on the price of bank shares, and the weaker the competitiveness of commercial banks, the bigger the impact and the larger the reserve tax concerned. For a certain bank portfolio, the rise of the statutory reserve ratio and its yield rate appear in a marked negative correlation. As time goes on, the rise of the statutory reserve ratio will have a smaller and smaller impact on its yield. That means when commercial banks use various means to actively absorb savings, supplement capital, enhance their competitiveness, the impact of commercial banks affected by the reserve ratio hike event will become smaller and smaller, and the reserve tax they pay will be less and less.