Research On The Fair Value Of Listed Commercial Banks And Credit Behavior

Fair value was first pushed to the cusp by the financial crisis which broke out in the year of2007. A great many people doubted the pro-cyclical effect of fair value accounting exacerbated the sprawl of the crisis, which triggered quite a few experts in academic or practical community to study and debate about the pros and cons of fair value. With the issue of New Accounting Criterion, fair value was formally used wielded in commercial banks of China, which provided a favorable opportunity for the research of the relationship between fair value accounting and credit behaviors of domestic stock-listed commercial banks.Therefore, on the basis of theory research of predecessors, this thesis discusses whether the utilization of fair value will lay an influence on the credit behavior of stock-listed commercial banks, and goes deep into if the significance of business cycle and banking system will alter the influence.We hope that a beneficial reference will be offered by this thesis when national relevant government departments are making policy of macro-economy or supervising the behaviors of domestic stock-listed commercial banks.The structure of this thesis is as follows.The first section is introduction. The New Accounting Criterion implemented in2007firstly employed the measurement attribution of fair value. These made a significant influence on the business banks which possess many financial assets as well as financial liability. Accompanied by the outburst of financial crisis of2008, all sectors of society were skeptical about fair value accounting. These events pressingly reflect the necessity of the influence of study of fair value on the domestic business banks.The second section is literature review. On one hand, the review tidies the relevant study on fair value. On the other hand, it trims the study of the effect of capital regulation to the credit behaviors of banks in two aspects of home and abroad. The third section is theoretical analysis. We carry on the elaboration from the relevant fundamental theory of fair value and the relevant theory of capital requirement regulation.The fourth section is hypotheses and models of study. We expose three assumption of the basis of the theoretical analysis and establish models accordingly to verify the existence of the transmission mechanism of capital regulation.The fifth section is the result and analysis of demonstration. It mainly covers the selection of samples, definitions of variables and analysis of statistical result, the correlation between variables.The sixth section is the research result and policy suggestion. The conclusion of this thesis is that fair value will influence the credit behavior of banks via affecting the capital adequacy ratio, i.e. transmission mechanism of capital regulation exists. Nonetheless, this conclusion will bring forth discrepancy along with the difference between business cycles and the significance of banking systems.The main contribution of this thesis:Firstly, the research content is novel. This thesis studies the effect of the fair value on the credit behaviors of business banks from the view of the regulation of capital requirement, sets up bridge of the relationship and puts forward the transmission mechanism of capital regulation. The conclusion of this study will help the banks adjust the proportion of financial assets, respond to the requirement of capital regulation. This conclusion also offers a valuable reference for the decision-making of the banks when they are implementing rational economic credit behavior.Secondly, the innovation of this thesis is it studies whether the transmission mechanism of regulatory capital exists from the perspective of the significance of macro-economic environment and the banking system. The enlightenments of this study is:First, it exist that unsystemically important bank will cater to the requirement of regulation of capital adequacy ratio by adjusting and controlling the measuring assets of fair value. Second, in the declining economic cycle, the pro-cyclical effect of fair value accounting would inhibit the credit behavior of banks, which will cause one disaster after another to the original economic downturn. Relevant government departments should establish corresponding policy to circumvent this kind of phenomenon.