Study On The Impact Of Prudent Capital Regulation On The Efficiency Of Commercial Banks

The global financial crisis,which erupted in 2008,has had a nasty impact on economies,reflecting economic globalization and financial liberalization.Strong regulation of the banking sector has become a top priority.Commercial Banks are different from ordinary enterprises.Their risks are of great vulnerability and infectivity,which makes them implement stricter supervision measures for commercial Banks.China's regulators will Basel ? combined with Chinese actual conditions,develop a series of legal provisions on bank capital regulation,purpose is to strengthen the risk resistance ability of the commercial Banks,to maintain the steady and safe operations of commercial Banks.In some ways,capital supervision can protect the Banks from the risks in the process of operation and improve the management level of the Banks.Another perspective,the mandatory provisions of the bank capital regulation of minimum capital reserves to limit Banks' risk behaviors,this makes the bank the money is in idle state,will inevitably have a negative impact for the efficiency of commercial Banks.How the relationship between the two has been studied in the academic world.This article selected a total of 17 commercial Banks in China as the research sample,the first to use DEA model to measure the sample bank total factor productivity,the results showed that total factor productivity in different between Chinese commercial Banks have some differences between the nature of the bank.The efficiency of joint-stock commercial Banks is generally higher than that of state-owned Banks.After measuring the efficiency,this article will be explained variables,the bank TFP index as capital adequacy CAR,leverage LR,liquidity ratio independence IDX and provision for coverage in PC as explanatory variables,as a representative of the four regulatory.Using panel threshold regression model,the following conclusions: both the capital adequacy ratios and leverage effect on the efficiency of the bank is positive,the more stringent regulatory indicators will promote the improvement of the efficiency of the bank,but the positive correlation effect will gradually weakened;The ratio of liquidity to the efficiency of commercial Banks is negative,and the negative effect will gradually increase.The impact of provision coverage on the efficiency of Banks is non-monotonous and fluctuates.Finally,this paper concludes and tries to give corresponding policy Suggestions from both the regulatory authorities and the commercial Banks themselves.First for regulators: the regulatory index efficiency of a series of nonlinear relationship withthe bank suggests that the regulatory index is not as tightly as possible,but there is a critical node,prudential regulation will force Banks to keep more assets,thereby increasing the cost allocation,when the cost more than the potential benefits of the risk,the regulatory index is no longer beneficial to continue to improve the bank efficiency,even can damage efficiency.So,just rely on to improve the standard of prudence regulation is unscientific,regulators should comply with the economic situation,dynamically and flexibly to formulate reasonable regulatory indicators,to balance the bank management of prudential and efficiency.For commercial Banks themselves at the same time,should meet regulatory requirements under the condition of the indicators will maintain in a reasonable range,not blind pursuit of high performance,reasonable capital allocation and capital to fill supplementary way,develops the new profit growth point.