Research On The Relationship Of Capital Adequacy Ratio And Bank Performance Of China Listed Commercial Banks

The core of the modern economy is the financial industry.Bank assets reach 90% in the financial industry;banking industry occupies the core position of the financial industry.Bank performance is the concentrated expression of commercial bank in the financial market,which provides an important guarantee for the development of commercial banks in the future.So it is important to improve the performance of commercial banks in China's banking industry.Since international regulators began to pay more attention to the capital requirements of commercial banks,capital adequacy ratio,as an important indicator of regulatory authorities in the capital,is a measure of the stability of commercial banks and an important standard to resist risks.How to deal with the relationship between the banks' development and the requirements of the regulatory authorities,is the main problem of the modern banking industry in China.This paper analyzes capital requirements of commercial banks from domestic and foreign respective and presents many charts to analyze the Tie I capital,Tie II capital,capital adequacy ratio and core capital adequacy ratio of Chinese banks.In empirical research,16 China listed commercial banks' data from 2007 to 2014 are collected.They are altogether 3072 unbalanced panel data and divided to two sub samples for descriptive analysis and regression analysis with random effects model,fixed effects model and mixed regression analysis in EViews.The conclusion is that the capital adequacy ratio and bank profitability are positively related,the core capital adequacy ratio and bank profitability are the same,the relation of core capital adequacy ratio and bank profitability is greater than that of capital adequacy ratio;for the stated-owned commercial banks,the relation between capital adequacy ratio and loan-to-deposit ratio is negatively related,and the relation between capital adequacy and non-performing loan is positively related;besides,the conclusion is opposite on liquidity and safety in terms of stockholding commercial banks.In the end,some reasonable suggestions are recommanded from two respectives—commercial banks and regulating sector.