Research On The Relationship Between Capital Adequacy Ratio And Commercial Bank Risk

Bank capital adequacy regulation is the core issue of promoting national banking and financial market stability and development, especially after the proposal of the Basel III, the higher the level of capital adequacy ratio and more stringent capital regulation gradually influence and change the commercial bank's development strategy and business model. Capital adequacy ratio is a measure of an important indicator of the asset quality and risk management of commercial banks, the capital adequacy ratio plays a decisive role in the steady operation of commercial banks.To study the relationship between capital adequacy and commercial banks, and to maintain the appropriate level of capital adequacy, to adjust the contradiction between risk and return is the significance of this paper.This paper expounds the course of supervision in our country's capital and the problems existing in capital adequacy management. We discuss the influence mechanism of capital adequacy rate to the commercial banks, describe the transmission process of changes in capital to bank risk from the capital and assets channels, compare and analyze the current situation of the capital adequacy ratio level and the capital structure of the bank as a whole and different types of banks.This paper establish simultaneous equations model, selects the panel data of2003-2014 14 listed banks, the ratio of capital and risk weighted capital adequacy ratio. In entering into the macro and micro control variables based, we do empirical analysis of the relationship of changes in risk and changes in the capital. The results showed that both were negatively related, improving capital adequacy ratio and conducting the reduce the risk of banks is good to improve the bank's risk management. In addition, in order to ensure the robustness of the empirical results,we make the way of data to state-owned and non-state-owned distinguish, results show that negative correlation between the empirical capital adequacy and risk is constant.Capital adequacy and risk management is an important part of the developmentof commercial banks. We should pay more attention to the significance of bank capital management and capital structure optimization, improve capital adequacy ratio, improve the risk management of banks and their business model, enhance the core competitiveness of commercial banks in our country.