Research On Financial Pressure On Bank Monitoring

Some foreign studies show that banks have very good supervision effect on enterprises through loans,while some studies show that the supervision effect of banks in emerging economies is not obvious.In recent years,some domestic scholars also studied whether bank loans have good supervision effect on China enterprises with loan announcement effect;however,these studies fail to consider under different financial pressures,the stringency of screening and supervision on enterprises may be different.This article is to study the influence of financial pressure on bank loan supervision.Based on the historical data of listed companies from 2007 to 2015,this paper tests how different degrees of financial pressure influence the supervision of the bank on enterprises through loans with loan announcement effect.First,select 17 indexes of six secondary markets including banking,money market,securities market,policy environment,external financial market and real estate,with CRITIC weighting method,build China financial pressure index(FSI)and pressure index of each submarket.Then,with event study method,calculate the abnormal return of 10 trading days before and after loan announcement date,and obtain the cumulative abnormal returns(CRA)of specific event window,which is regarded as proxy indicator reflecting bank supervision function.Finally,with the cumulative abnormal returns(stand for bank supervision)as the explained variable,financial pressure index as the explaining variable,and other indexes which affect the stock prices as multiple regression model of control variable,test the influence of financial pressure composite index and financial pressure index of each submarket on the cumulative abnormal returns.Main conclusions of empirical study as follows:(1)whatever financial pressure,bank supervision effect is not obvious.Within event window period,the cumulative abnormal returns of loan announcement is negative,capital market believes that banks have no supervision function.(2)the bigger financial pressure index,the greater the cumulative abnormal returns,that is,the smaller negative impact of bank loans on stock price.It means that when financial stress is small,bank credit audit and post-loan supervision are relatively loose,as the financial pressure increases,bank loan approval conditions become relatively strict,and the supervision function of bank loans is enhanced.(3)the influence of submarket financial pressure index on bank supervision is similar to that of comprehensive financial pressure index on bank supervision,and the financial pressure directly from the internal banking system has the greatest impact on bank loan supervision.Main contribution and innovation of this article: the existing literature on bank loan supervision is mainly about empirical test on whether bank loans have supervision function,little on the influencing factors of bank loan supervision,and only study just mainly analyzed the influence of the monetary policy environment change on bank loan supervision;This paper focuses on the influence of financial pressure on bank loan supervision,helpful to improve the study of this field.