An Empirical Study On The Impact Of Stock Price Fluctuation On Bank Credit

With the development of capital markets and financial innovation,the relation between the asset prices fluctuation and real economy had been proved by scholars again and again.The subprime mortgage crisis,which began in the United States in 2007,had a huge impact on its financial system and macro economy and spread rapidly to the world,leading to a global recession.And this event further suggested that there was a close link between asset prices and bank credit.With the rapid development of China's stock market,the volatility of stock price and bank's credit has gradually been normal and showed a strong correlation.Since the expansion and tightening of bank credit will influence the real economy through the currency creation,it has important theoretical and practical significance to study the impact of stock price fluctuation on the bank credit to reduce the influence of stock price fluctuation on macro economy,optimize the regulatory indicators and maintain financial stability.The transfer mechanism of stock price in this paper is discussed from the aspects of supply and demand,which mainly includes wealth effect,herd behavioral,Tobin Q effect,external financing cost channel,financial innovation channel,balance sheet channel and capital constraint mechanism.Based on the theoretical analysis,this paper makes use of the financial data of 52 commercial banks in China from 2007 to 2015 to establish the panel data model to analyze the impact of stock price on bank credit.In order to study whether the equity and listing has an impact on bank credit sensitivity,this paper makes a grouping measure after the whole sample estimate and carries out the robustness test to verify the robustness of the conclusion.The empirical results show that China's stock price fluctuation has a significant positive impact on commercial bank credit,and the rise of stock price will drive the bank to expand the credit.At the same time,the credit scale of the state-owned banks is more sensitive to stock price than the non-state banks,and their loans are not affected by total assets,leverage rate or nonperforming loan ratio(NPL).Furthermore,stock price has a significant impact on the credit of listed banks,while the unlisted banks are not sensitive to stock price at all.Based on the above conclusions,this paper puts forward some suggestions from different perspectives.First,from the perspective of commercial banks,it is necessary to strengthen the credit management and capital management of commercial banks,establish the counter-cyclical capital buffer mechanism and improve the operating efficiency of state-owned banks.Next,from the perspective of the stock market,the government should curb speculation,strengthen investor education,and increase the residents' investment channels.And last,from a regulatory point of view,regulators should use a variety of macro-prudential regulatory tools to carry out counter-cyclical capital regulation.