The Research About The Influence On Bank Credit By Asset Price Changing Under Capital Restriction

With the development of the financial market, the event of the huge volatility ofthe asset prices occurs more and more frequently. Every time when asset prices risingrapidly and asset price bubble bursting had caused serious influences to one countryand even the global entity economy. As the center mechanism in financial activities,the influence which commercial bank’s credit scale has brought to financial economyis obvious. The study of whether the volatility of asset prices can influence the entityeconomy by affecting the bank credit could clarify the factors considered forformulating monetary policy, help the government make credit policy morecomprehensively and more effectively, the above is full of significance both in theoryand practice.On the basis of reviewing the previous literatures, this essay uses the relativetheory of the asset prices affecting the bank credit as the basic supporting, andanalysis the typical facts that asset prices’ fluctuation has impact on bank creditgreatly, then combine the current situation of asset prices and bank credit in ourcountry with the angle of capital constraint for giving a reasonable explanation to theinfluential mechanism. In order to prove the correction of the theoretical analysis, thisarticle selects14commercial bank’s data, making an empirical study with themeasurement of capital constraint via using the effect on bank credit by prices’fluctuation in stock market and real estate market. And this essay finally get that:Firstly, the fluctuation of asset price behaved by stock price and real estate marketprice is highly related with bank credit, the formation of asset bubbles bursting andgrowth is closely related to bank credit scale. Secondly, the capital constraintresponded by bad loans rate is highly correlated with bank credit growth scale. Thishas showed that capital regulation in our country has clear binding on bank credit, thesoft capital constraint has been improved. Hence, the credit policy formulation needsto take asset market price into consideration, and make full use of the effect of capitalregulation. Through the last analyses, this essay proposes suggestions in three aspectsas government, stock market and real estate market, providing certain reference onformulating the credit policy, maintaining the stability of asset price and thenstabilizing the national economy.