The Effective Test On The Counter-cyclical Buffer Mechanism In Commercial Banks Of China

In 2008, the global financial crisis led to a remarkable progress of the reform of the international banking supervision system which embodied in Basel Agreement III. Under the circumstances of financial globalization, it must will have a significant impact on global financial industry, and will also be a milestone in the history of Chinese banking industry. Constructing the counter-cyclical capital buffer mechanism is an important reform thinking of Basel Agreement III. Also, it is an inevitable requirement of Chinese banks to reply the new international financial environment. As a result, building a counter-cyclical regulatory capital framework for Chinese banking industry is a requisition for the industry to actively respond to the new international financial environment. Therefore, in the post-crisis era, how to strengthen a counter-cyclical capital regulatory, effective control and manage the risk of commercial banks, in a recession how to release the risk stably which is accumulated in the period of economic, make macro-economy more stable, are urgent and important for the reform of commercial banks.According to the idea in economics which is combined by economics theory and Econometrics, the paper uses normative analysis and positive analysis method. On the basis of the recognition of the pro-cyclical formation mechanism of commercial banks regulatory capital, the paper uses of econometric models given by the Basel Committee to test the effect of this mechanisms in the capital regulation of Chinese commercial bank. During the process, there adds some new indexs to give assist. Researches show that the counter-cyclical capital buffer mechanism will be useful to the commercial banks of China if it can be improved.During the process of constructing the counter-cyclical capital buffer mechanism, the identification of the business cycle phase is extraordinary significant. Thus, the paper constructs a risk index system of macroscopic direction so as to provide a further reference to discern economic operation cycle and decide when to provision or release buffer capital. At the last part of the paper, the author probes into the corresponded adjustment and reform of China’s bankingindustry in the purpose of ensure the smooth running of the counter-cyclical capital regulatory framework.