The Analysis Of Capital Supervision And Commercial Bank Risk-taking Behavior

Capital is an important tool for commercial Banks to resist the financial crisis, and sufficient capital is essential for commercial Banks to have a sustainable operation and a steady development. Since1988when the Basel Committee on Banking Supervision (BCBS) launched the Basel Capital Accord (Basel I), Capital adequacy ratio has been regarded as an important regulatory indicator of supervisory authority in every country. During the20years of Basel Accords implementation, international financial system has been suffered from several severe financial crises; after these crises, the international regulatory system, which core is capital supervision, has been improved to adapt the development of international banking industry and the need of regulatory.Since early2007, The New Basel Capital Accord (Basel II) began to implemented worldwide, but then the outbreak of the subprime crisis and the subsequent global financial disaster not only caused a huge disaster in the financial sector and real economy but also exposed the vulnerability of the supervision system of banking industry, which caused a unprecedented challenges to the original mode and philosophy of financial supervision. With bankruptcy and reconstruction of many foreign banks, there has been doubt on the effectiveness of Basel II in capital supervision, and whether the implementation of the government regulation can effectively restrain the bank risk became the focus point.The general train of thought of this paper is:First, elaborate the selected topic background and significance, and define the main concepts in this paper. Then based on the study of capital supervision’s influence on the risk-taking behavior of commercial Banks, combined with the development of the Basel Capital Accord and deficiency of each edition, propose a clear analysis on the influence of Basel Ⅲ on Chinese banking industry and the challenges faced by our supervisory authority. Later this paper uses the theoretical and empirical analysis method to analyses the influence of capital regulation on the risk-taking behavior of commercial Banks in China.