Interest Rate Liberalization?Equity Structure And Commercial Bank Risk

Since the 1990 s,our nation has decided to perform an Interest rate liberalization reformation.During the process of acceleration of the reformation,spreads-narrow phenomenon emerged and also influenced the organization of asset and liability structure.With the continuous advancement of interest rate liberalization,the spread of deposits and loans are reduced.Hence,commercial banks are undertaking the further influences.Though different equity structures may lead to a different risk sensitivity for different commercial banks.Therefore,this article selects 44 banks' data from 2007-2015,and 396 bank annual observations rather than penal data;applied two methods of risk measurement(risk assets and Z-score)to study and analyze the interest rate liberalization,equity structure,and bank-risk indicators.The prime consideration of this article is regarding to different equity structures' different influence upon bank risk during the Interest rate liberalization reformation period.Also,the article will consider the macroeconomic environment and listing factors' influence upon commercial banks.As for the conclusion;first of all,the interest rate liberalization imposes different effects upon commercial banks' risk with different equity structure.For government controlled banks,the degree of interest rate liberalization weakens bank risks' positive influence.As for private-held banks,the liberalization has an opposite effect.As for state-owned commercial banks,the effect is among the two discussed above.Therefore,interest rate liberalization has different degree of influence on commercial banks with different equity structure.Base on the significance of the influences,from strong to weak,we have the following order: Private-held commercial banks,Stateowned commercial banks and Government-controlled banks.Furthermore,the more concentrated the stock is,the less positive influence of the liberation to reducing bank risks.For government-controlled banks,the degree of the liberalization has a weaker effect upon reducing bank risk.As for private-held banks,the effect is stronger.Lastly,listed banks tend to have a higher ratio of risky assets,and for statecontrolled banks,the listing has a more positive effect upon the increase of banks' behavioral risk,while there is no such difference for private-held banks.