The Effect Of Capital Regulation And Deposit Insurance On Risk

As of 2016,125 countries have established deposit insurance worldwide.In 2015,China broke the drawbacks of the former implicit deposit insurance,and formally implemented deposit insurance.The research shows that deposit insurance creates the moral hazard problem.The new regulatory standards of Basel III was implemented in 2010,and capital regulation has constraint effect on risk-taking of commercial bank.Thus,to study the joint effect of deposit insurance and capital regulation on risk-taking of commercial bank is of great significance for the financial stability in China.This paper is divided into five chapters based on the aim of the research on joint effect between capital regulation and deposit Insurance on risk-taking of commercial bank.Chapter One,on the basis of summarizing related literatures,puts forward the research ideas and technical route.Chapter Two,theoretical analysis.On the basis of the definition of related concepts,analyzes the development of deposit insurance worldwide.Furthermore,analyzes the relationship of capital regulation,deposit insurance and risk-taking of commercial bank.Chapter Three,the effect analysis of capital's restraining on risk-taking of commercial bank under deposit insurance.Based on the existing model of the influence of capital regulation on risk-taking of commercial bank,the paper introduces the factors of deposit insurance and risk-based deposit insurance premiums respectively to mathematical analysis,and puts forward two theoretical hypotheses.Chapter Four,selects the panel data of global 325 commercial banks in 2004-2015,empirically examines the joint effect between capital regulation and deposit insurance on risk-taking of commercial bank;Further,comparative analyze the different restraint effect of capital regulation on risk-taking of commercial bank under fixed deposit insurance premiums and risk-based deposit insurance premiums.Finally,the conclusion and relevant policy suggestions are obtained.The main innovative of this paper is embodied in two aspects:First,the innovation of research perspective.The existing literatures study the influence of capital regulation and deposit insurance on risk-taking of commercial bank respectively,and seldom study how the joint effect of the both affects risk-taking of commercial bank.Therefore,the paper tries to study the joint effect of capital regulation and deposit insurance on risk-taking of commercial bank,and further introduces the factor of risk-based deposit insurance premiums to study the joint effect of the both.Second,the innovation of research method.On the one hand,introduces the factor of risk-based deposit insurance premiums,and use mathematical model to demonstrate the effect of capital regulation on risk-taking of commercial bank under risk-based deposit insurance premiums;On the other hand,the paper selects the panel data of global 325 commercial banks in 2004-2015 to empirically test the joint effect of the both and the joint effect after introducing the factor of risk-based deposit insurance premiums,and comparative analyze the different restraint effect of capital regulation on risk-taking of commercial bank under fixed deposit insurance premiums and risk-based deposit insurance premiums.