The Measuring Of The Risk-taking In The Banking After Introduction Of Foreign Strategic Investors

With the support of China’s government regulators and the openness of financial sector, many of Chinese commercial banks have introduced foreign strategic investors,and launched a number of financial cooperation. According to many scholars research,the debate about the introduction of foreign strategic investors focus on the necessity and effect, including banking efficiency, innovation and other aspects of the bank’s risk level,. thus,the introduction of foreign strategic investors to China will eventually take What kind of impact to the bank system? either from the performance or the level of risk, the study of the influence of foreign strategic investors for the development of China’s banking sector stability have it’s practical significance.Firstly, our paper analyze the introduction of strategic investors in the role of the bank exposures in theory. Then, we put forward four assumptions and take research on the introduction of foreign strategic investors and risk-taking relationship; foreign strategic investment holding period and risk-taking relationship; stake holding and bank exposures; the difference about risk taking level to different kind of banks’ foreign strategic investors introduction. The Sample select 20 banks that for the first time have introduced strategic investors before 2014, by introducing interaction terms,we use a fixed effects model to deal with our panel data. The empirical results shows that: introducing foreign strategic investor have positive effect to bank’s risk taking;longer the stake holding time is, more obvious the positive effects are;the relationship about stake holding and risk taking is complicated, there is no significant relationship between them; different kinds of banks have different effect to risk taking as for introducing foreign strategic investors.According to the result of our research,we have put several relevant recommendations: Efforts should be made to realize the depth of cooperation between banks and foreign strategic investors; by introducing foreign strategic investors we should absorb more advanced risk management experience and technology; we should try to improve our banks’ core competence from the progress of business management, risk control and technical innovation. We ought to search for long-term cooperation and diversify restrictions on stake holding. Domestic commercial banks’ introduction of foreign strategic investor have been prevalent for a while,they expect to improve themselves by stake trading,mechanism refreshing and government developing,however,on the process of searching for external strategic corporation,ourdomestic banks should improve their ability about risk-control as well.