An Empirical Study On The Effect Of Off-Balance Sheet Business On Bank Stability

With foreign banks entering China,the process of domestic interest rate marketization is advancing,as well as the domestic customer investment demand diversification and internationalization.Domestic commercial bank's traditional way of profit to deposit and lending spread as the main source of profit is gradually changing.China's commercial banks operating income structure in the off-balance sheet revenue accounted for an increasing trend.The existing research mainly focuses on the impact of off-balance sheet business on bank risks and benefits,and can not fully reflect the impact of off-balance sheet operations on banks.Only from the perspective of bank stability or crisis can we be more in-depth and more comprehensive.Based on this,this paper empirical explored the impact of off-balance sheet business on the stability level of single commercial banks.This paper first defines the two indicators of banking crisis and stability,and then analyzes the current situation of the proportion of off-balance sheet business in China's commercial banks,and then elaborates the mechanism of the off-balance sheet business on the stability of the bank.Taking into account the composition of the off-balance sheet business of different components of the risk characteristics of large differences.Therefore,this article further classifies off-balance-sheet business,which divides off-balance sheet business into fee and commission income and transaction and financial derivative income.On the basis of this,this paper takes 69 commercial banks of our country as the research object,and uses the PD-Score model to measure the crisis probability level of commercial banks,and test the influence of off-balance sheet business and its components on the stability level of commercial banks.Then,the commercial banks are further classified to explore the impact of off-balance sheet operations and their components on different types of banks.The empirical results show that,off-balance sheet business can significantly improve the stability of commercial banks,including the increase in fees and commission business to help improve its stability.Trading and financial derivatives business has a negative impact on the stability of commercial banks,will reduce its stability.The study found that off-balance sheet business has a significant positive impact on the stability of large banks,the impact on small and medium banks is not significant;the increase in the proportion of transactions and financial derivatives have a negative impact on the level of bank stability,And commission business can both improve the stability of large and small banks.