Bank Behavior And Economic Cycle Fluctuations:Evidence From The Bankers' Questionnaire

Although the economic is constantly developing in the long term,it is always accompanied by periodical & cyclical fluctuations,which in extremity becomes an economic crisis.During the process of economic globalization,a country may undergo serious economic fluctuations which hampers long-term economic growth.In the today's economy,the financial markets deeply influence the economy.Among the many factors that influence and synthesize the economic cycle,the role of financial factors is significant.On one hand,the financial sectors play an important role of financing and optimizing the allocation of resources.The existence of financial intermediation greatly reduces the transaction cost and the market risks effectively.The financial sector is the core of the economic system since it provides liquidity to the market and promotes the development of production and stabilize economic growth.On the other hand,a financial market with frictions has obvious pro-cyclical tendencies.With the continuous reform of the financial system,the impact of financial factors on the economic cycle is increasing,and the banking sector is one of the most important sources of economic fluctuations.Chinese financial system is a veritable bankdominated financial system where indirect financing is the main method.In the process of financial resource allocation,the banking system plays a decisive role.The adjustment of bank credit standards directly affect the corporate financing costs as well as the enterprise output,making economic fluctuation extremely sensitive to bank credit standards.Bankers' credit behavior engaged in bank lending business decision.Affected by factors such as the economic situation,regulatory policies and competitors,bankers will adjust credit standards and the credit scale,which directly impact our macro economy.As market-based interest rates is playing an increasingly important role,bank systems will become more autonomic.Therefore,a further study of bankers' behavior and economic fluctuation will be helpful in preventing financial system risks and maintain steady economic growth,it also could offer a new reference for macroprudential regulation.This paper conducted an empirical analysis on the relation of Chinese bankers' behavior and macro economy,and explored the accuracy of China bankers' judgment about macro economy.This article analyzed the correlation of Bankers confidence index which is the bankers survey results from the People's Bank of China and Macroeconomic climate index(leading index and uniform index,lag correlation).This paper applied five methods including the HP filter method,the BBQ method,the MSAR method,time domain method based on VAR forecast error and the frequency domain method based on spectrum analysis,to measure the relationship of the banker confidence index and macroeconomic climate index(leading index and uniform index,lagging index).We also validated the relationship between China's credit cycle and the economic cycle,and explored the possibility and necessity of raising bankers' decisionmaking freedom in China by comparing the degree of banker's perception of economic volatility.This paper makes a systematic analysis of the correlation between Chinese bankers' behavior and macroeconomic fluctuation.The empirical result shows that,the bankers' confidence index is more correlated with the leading index of macroeconomic climate index,which means that the bankers do have ability to predict and perceive the future economic changes,and the Chinese credit cycle has a strong cyclical effect.In addition,through comparative analysis,this paper proved that the bankers' confidence index is a Better measure of the bank's own behavior,although the bank loan balance is widely used in existing research as bank behavior research variables.