Research On The Influence Of Ownership For Small And Medium-sized Banks Stability

As the first five private Banks opened, the fear that Private Banks without the government supports, its unique ownership structure will affect the stability of the bank. So the ownership structure, especially the government ownership influence on stability of commercial bank not only define the government ownership participation in the commercial bank, but also clarify the worry about private bank special equity structure impact on the stability, and provide advice to the arrangement of the private bank ownership structure.Using a unique bank-level panel data of Chinese 39 commercial banks including Joint-stock commercial Banks and City commercial Banks from 2007 to 2012, the paper analyzes how government ownership comprehensively in fluences bank stability with two different measures of bank stability which are Z-score, a standard measure of distance from insolvency and PD-score, the distress probabilities derived from hazard models. We draw the following conclusions: First, empirical results support the conclusion, the results show significant negative abnormal bank assets and bank stability, while the size of the joint-stock commercial Banks generally greater than the city commercial bank, in addition, after intervention virtual vari ables, joint stock commercial Banks and PD-score has a significant positive relationship. The reason for this may be largely medium-sized Banks also exists in China's commercial Banks "trap". Second, the empirical results show that the higher government o wnership lead to the lower the Z-score, the higher PD- score, the greater the unstable of the bank. Government indirect stake influence on the Z- score more and more significant. Third, The empirical results show that the GDP growth rate is negatively r elated to the Z-score, but not significantly, and PD- score was significantly positive correlation. Illustrate the bank economic high growth and high yield may cover a potential crisis of bank, at the same time, also suggests that GDP growth during the period of the sample has quality problems. Fourthly, the higher government stake, the more concentrated the bank loans, and city commercial bank is more obvious; concentrated the bank loans are bad for bank stability.According to the results of empirical research on the following conclusions: First, the stability of the joint-stock commercial Banks is lower than the city commercial Banks. Second, the government stakes are negatively related with bank stability, and the government indirect stake more tend to go against the bank stability than direct stake. Third, China's rapid growth of GDP in 2007-2012 despite increased Banks' earnings, but did not increase the stability of the bank, on the contrary increased the possibility of bank crisis incidents. Fourthly, ownership structure through the credit behavior influenced the stability of the bank.