Research On Capital Growth And Financing Of Listed Commercial Banks Of China

Due to the destructive power of the 2008 financial crisis, international banking regulation standards improved again. In 2010, Basel III has been issued, which combined with micro and macro prudential supervision in order to build a comprehensive framework. However, the profitability of Chinese banks is poor and the capital of them is hard to meet the standards, so that they had to refinance frequently to achieve capital goals. Therefore, the paper studies the impact of regulation standards on capital growth and refinancing behavior of Chinese banks, for the purpose of providing academic reference to regulators and banking industry.The paper uses the panel data of 16 listed banks in China from 2002 to 2014, and mainly adopts empirical method, literature research, event study method and so on. At first, chapter one introduces the changes of regulation and macro-economy, demonstrating the background and significance of our research. The second chapter is definition of concept as well as literature review based on capital adequacy ratio. The third part is the description of status and the theoretical deduction. Next is the empirical analysis part. Since China implemented the new regulation in 2013, the data is divided into two stages. Final chapter summarizes the conclusions.Our empirical results show that there are differences between the conclusions of two stages. Before 2012, more pressure leads to more capital growth and less tier one capital financing; more capital buffer will enlarge the financing scale. On the contrary, after that the greater the regulatory pressure, the more capital growth, buffer and financing scale is negatively correlated. In summary, we believe that before 2012 regulatory pressure has little effect on bank capital compared with operating pressure. Besides, difficult environment such as the lack of channels and sophisticated procedures is another factor. However, when the regulatory pressure increased, especially the redefining of capital, facts and theories are much closer.