Empirical Analysis About The Impact Of The Deposit Reserve Ratio Adjustment On The Chinese Listed Bank Shares

There are three monetary policies, among all of which reserve against depositsystem is frequently used to regulate the macro-economy by central government.Indeed, one of the advantages of required deposit reserve policy is that it is extremelyeffective and easy to operate. However, the obvious function of this policy has made itbe shelved and forgotten by western countries. When we look at PBC’s frequentregulation of the policy, we would find that it has adjusted the deposit reserve rate46times and the latest one was on February4th,2015. Therefore, it is obvious that PBCstill attach great importance to the application of this monetary tool.Commercial bank is the crucial part of financial system as well as economic pillarof one country. Monetary policy will transmit to other industries through thecommercial bank. Meanwhile, the implementation of monetary policy, especially therequired deposit reserve rate, directly affects the operation of commercial bank.Therefore, the publication of monetary policy’s influence over share price ofcommercial bank is the hot spot which, at present, is under study.The passage mainly illustrates the reserve against deposit system, the mechanismfor its influence over stock market, and the application of the deposit reserve systemin our country. In terms of the characteristics of stock-listed commercial bank, weregard the adjustment of required deposit reserve rate’s influence over share price as abreakthrough point, use event study, choose16stock-listed commercial bank asresearch sample, and conduct an analysis by using the required deposit reserve ratefrom September15th,2008to February2nd,2015as study object. When it comes tothe calculation of earning ratio, the passage referred to previous academic opinion andthe characteristics of stock market in China and estimates the data by using marketadjustment. In addition, the passage analyzed the present situation of large-scalecommercial banks and small and medium-sized commercial bank. After massivecalculation, it turned out that the deposit reserve rate’s influence over share prices isnot always obvious. What’s more, the share prices of small and medium-sized commercial bank is more likely to be affected by its adjustment. In view of theseoutcomes, the passage analyze reasons on this issue and offer readers someconstructive suggestions.