An Empirical Study On The Periodicity Of Capital Buffers In Chinese Commercial Banks

With the development of Chinese commercial banks,their function is now becoming more and more important.The steady operation of commercial banks is of great significance towards the entire financial system and macroeconomics.However,in recent years,the problem that the operation of commercial banks is procyclical has been exposed.There will be positive feedback between commercial banks' behaviors and the economic cycle,which will aggravate macroeconomic instability.This issue has caused many discussions.Scholars talk about it that whether the supervision is not enough.To this end,both Basel III and Chinese ‘Administrative Measures for the Capital of Commercial Banks(for Trial Implementation)' have proposed requirements for the establishment of a macro-prudential supervision system.The establishment of counter-cyclical capital buffering mechanism is to weaken the inherent pro-cyclicality of commercial banks.Therefore,it is of great practical significance to study the cyclical problems of capital buffers in chinese commercial banks.On the basis of reviewing the Chinese and foreign literature,this article sorts out the related theory and emphasizes the significance of the counter-cyclical behavior of commercial banks.Then,based on the Basel Accord and Chinese regulatory requirements,it analyzes the cyclical performance of Chinese commercial banks and looks for possible factors that affect their cyclical performance.In the empirical process,this study uses the data of 37 commercial banks in China from 2005 to 2016,and finds that the capital buffers of our commercial banks is counter-cyclical.Moreover,internal and external factors also affect their countercyclicality.First,during state-owned and large-scale joint-stock banks,the counter-cyclical nature is more pronounced.Second,after the implementation of ‘Administrative Measures for the Capital of Commercial Banks(for Trial Implementation)',the countercyclical performance of capital buffers in commercial banks has been strengthened.Finally,the use of monetary policy will also have an impact on the cyclical nature of commercial bank's capital buffers.Therefore,this paper makes suggestions towards different banks.Besides,it recommends that the supervisory authority implements different regulatory measures and strengthen coordination with other authorities.