The Effect Of Loan Loss Provision And Dividend Distribution To Capital Adequacy Ratio In Commercial Banks Based On Empirical Study

The development of the commercial bank is vital for economic and social development, because of the high debt management, so that it is often brought to the attention of the authorities. Capital adequacy ratio is an important index to measure whether the capital is enough or not, It is also the focus of the regulatory authorities detection. International regulators pay full attention to the regulation of bank capital,so it introduced the "Basel agreement", this is not only constraint the capital adequacy ratio of its members, but also to the global commercial banks. Our country at present is not Basel members, but we strictly enforce the "Basel agreement" standards.The capital adequacy ratio of commercial banks will be susceptible to the accounting policy and financial policy. Under regulatory pressure, bank managers may use the accounting policies and financial policies to control its capital level. In order to verify the capital adequacy ratio of listed commercial banks in China whether affected by the two big policies or not, we have analyzed the accounting policies and financial policies of listed commercial banks. through the analysis, we have found that the loan loss provisions is one of the accounting policies indicator which the bank manager can choose; Dividend distribution is one of the financial policies indicator which the bank manager can choose. So, whether the bank manager will use provision for loan loss provisions and distribute dividends to manipulation of the capital adequacy ratio? Is there a link between the two? These problems are worth studying.Based on China’s a-share listed16commercial banks from2005to2013annual financial data as the research object, we use the method of empirical to test the influence factors of listed commercial bank capital adequacy ratio in our country. The empirical results show that the bank managers can use the accounting policies and financial policies to adjust capital adequacy ratios. The article concluded that:in terms of accounting policy choice, when managers need to improve the capital adequacy ratio, they will provision for loan loss provisions to increase capital management; In terms of accounting policy choice, although retained profits can improve the bank’s capital adequacy ratio, but the bank manager has the pressure by the shareholder dividends, so they need to make the trade-offs. In addition, the accounting policy of listed commercial banks is a supplement to the financial policy.According to the article conclusion, we put forward the following suggestions: From the perspective of the outside of the bank:the government should actively improve the stock market; Strengthen supervision; the industry organization should play the role of self-discipline. From the perspective of the internal of the bank:bank managers should set up the correct concept of regulation; strengthening information disclosure; scientific and effective provision for loan losses; the accounting policies should be combined with financial policies.