The Impact Of Interbank Business On The Liquidity Risk In China

This article analyzes the impact of interbank business on the liquidity risk in China.In recent years,liquidity risk has caught more and more concern.After the global financial crisis,the Basel Committee developed the Basel III international regualatory framework for banks.The Liquidity Coverage Ratio and the Net Stable Funding Ratio are two global regulatory standards on bank capital adequacy and liquidity,which help to develop a more restrictive and acuurate regulatory system.During the new normal era,Chinese economy faces the financial reform,the tightening of regulations and the marketlization of interest rate.Therefore,our country has tightened the control of credit among commercial banks.Since the tightened control of credit and the shrinking interest gap,commercial banks in China have focused on the interbank business as a new profit growth point in decade.The percentage of interbank assets and liabilitites in the balance sheet has grown rapidly.The article introduces the history and the current situation of the interbank business in China,including the business model and structure,the regulations,the comparison between banks,the driving factors,and the comparison between China and the global.After analyzing the theories related to the liquidity risk,the article concludes that the interbank business can bring servere liquity risk to commercial banks due to its' endogenous and exogenous problems.The article calculates the Net Stable Funding Ratio of 25 listed commercial banks in China.And then anlyze the panel data empirically.The article finds the development of interbank business can help to improve the liquidity risk.However,the overdevelopment of interbank business will bring negative impact on the liquidity risk.Finally,based on the results of empirical analysis,the article concludes some advices for the development and supervision of interbank business.