Research Of The Regulation Of Bank Capital On The Asset Allocation Of The Small And Middle Banks

Basel Accord as the Guide of capital regulation has been the basic recognition ofthe global banking industry. Although the importance of bank capital regulation inchina have a late start, But always pay close attention to the dynamic of the BaselCommittee, actively follow the regulatory concept proposed by the Basel Committee,and the gradual improvement of the bank capital regulatory framework. Along withthe deepening of the reform and the development of the financial system, the smalland medium-sized banks came into being. As the supplement the large commercialbanks, small and medium-sized banks made the contribution to the development ofthe national economy, especially to the SME financing has been recognized by theworld. The capital regulatory help small and medium-sized banks limiting itsoperational risks, we must take into account its specificity to promote its healthydevelopment. Therefore, the study capital regulation has important impact on smalland medium-sized banks.In this paper, the study of small and medium-sized banks, Main bank capitalregulation on small and medium-sized banks asset allocation structure, uses acombination of theoretical analysis and empirical test. On the basis of theoreticalanalysis, we propose the hypothesis that when commercial banks are facing pressureon capital regulation, would choose to meet regulatory requirements by reducing theshare of loans in the asset structure, but compared to the large commercial banks andsmall and medium-sized banks tend to choose this method. In order to test thehypotheses, firstly, we determine the impact factors of small and medium-sized banksasset allocation structure variables from a macro and micro perspective. Secondly, thecomparison shows differences in small and medium-sized banks and large commercialbanks, virtual variable and cross-variable are introduced in the model. Thirdly, the useof regression analysis, an empirical test of the small and medium-sized banks’ capitalunder the supervision of the relevant data (2006-2011), the study results show that theassumption of the existence, namely small and medium-sized banks and largecommercial banks, asset allocation behavior is more vulnerable to the impact ofcapital regulation. Finally, according to the study results, we targeted and practicalpolicy recommendations.