Analysis Of Influence Factor Of Bank Risk-taking

In the post-financial crisis era, the uncertainty of China microeconomic situation isincreasingly serious. The changes of external environment, such as governmentmonetary policy, capital regulation and market expectation, give great challenges toChina banking system’s risk management. Hence, it provides significant reference forthe banking systems to control risk by studying external factors that influencingbanks’ risk-taking level.Firstly, by establishing dynamic panel data model, this paper studies the impact ofexternal factors like economic growth, monetary policy, capital regulation on banks’risk-taking level. The result indicates that in the circumstance of high marketconcentration, related variable of competitiveness and risk-taking level have positiverelationship, and banks have endogenous risk preference. Secondly, it uses PVARmodel to study the impact of the above4external factors on bank’s risk-taking level.The empirical result shows economic growth has negative influence on theaccumulation of bank risk-taking while the result the of market expectation isaccordant with the former but opposite in the long run. Under the impact of monetarypolicy, the correlation is positive in short term but it turns negative in the long term.Under the impact of capital adequacy ratio, the correlation is positive but it turnsnegative subsequently. Besides, according to the results of variance decomposition,economic growth has the strongest explanatory power of the fluctuations of banks’risk-taking level ((20%). Followed that are capital adequacy ratio (20%), marketexpectations(15%) and monetary policy(13%). Finally, based on above empiricalresults, it puts forward corresponding proposals and points out the furtherresearching direction.