A Study On The Relationship Between Loan Price Competition And Risk Behavior Of Commercial Banks

Since the end of twentieth Century,the reform of interest rate liberalization in China has brought about a far-reaching impact on the financial market.On the one hand,the interest rate marketization can improve the utilization efficiency of bank funds and efficiently configure the market resources.On the other hand,under the guidance of the goal of profit maximization,the acquisition of independent pricing power will encourage commercial banks to participate in the price competition in the financial market.The liberalization of the loan interest rate may cause the banks to reduce the loan interest rate in order to obtain more customer resources and greater profits,and lead to the change of the risk preference of commercial banks,and increase the uncertainty of the bank operation.In the past,domestic and abroad scholars have done a lot of research on the interest rate marketization and the price competition of the banking industry,but there are few studies on the relationship between the loan price competition and the bank risk behavior.In order to further understand the impact of the loan price competition on the risk behavior of commercial banks and provide management and policy basis for the management and regulatory authorities of commercial banks,this paper analyzes the mechanism of the impact of the competition on the risk behavior of commercial banks based on the theory of profit marginal effect and the theory of risk transfer effect.And this paper choose the NP ratio and the provision rate as the proxy variable of the credit risk behavior of the commercial bank,select the Z-Score as the proxy variable of the business risk,and take the annual data of 2009-2016 years of our country's joint-stock commercial bank as the sample,and make Empirical Study on the use of fixed effect model,which find the following conclusion:There is a reverse U relationship between market price competition and commercial bank credit risk behavior and business risk behavior.And based on the above conclusions,this paper puts forward relevant suggestions from two perspectives of regulatory authorities and commercial banks.