Research On Chinese Listed Banks For The Impact Of Equity Structure On Risk Appetite

Combining lessons learned from the financial crisis and the current circumstances of our country,we can conclude that nowadays,researches on optimizing banks' governance structure to control their risk are of paramount importance.Equity structure is the key content of bank governance,while its influence on bank's risk appetite remains uncertain.This paper starts with summarizing available research findings.After clarifying the conception of equity structure and risk appetite,the paper presents an index system and sets up a model to measure bank's risk appetite.Through theoretical and empirical study,we can conclude that: The relationship between the proportion of the largest shareholder and bank's risk appetite is shown as a U shape,while there is a positive correlation between the sum of ten largest shareholders' ratios and bank's preference to risk.If government is the biggest stockholder of the commercial bank,the bank is more likely to be a risk seeker.While the more shares the foreign investors among ten biggest stockholders hold,the less risk the bank is determined to take.Besides,the balance mechanism of shareholding does not have significant influence on bank's risk appetite.The variables selected in this paper can only measure the effects of checks and balances on the number of shares,but do not include the effects of checks and balances on equity attributes in the scope of the study.In empirical research,the concept of bank risk appetite and risk appetite control indicator is further clarified in this paper.The risk preference coefficient constructed using the analytic hierarchy process fully and accurately reflects the bank's active risk selection behavior.In this paper,the random effects model is used to test the hypotheses.The main conclusions are as follows: The equity concentration degree of listed commercial banks in China is in a “U”relationship with their risk preference.That is,there is an optimal model to make banks have the lowest risk appetite.The state-owned property of the first largest shareholder will increase the bank's risk appetite,but this result is not significant;the increase in the proportion of foreign shares will significantly reduce the bank's risk appetite;the share balance mechanismmeasured by the ratio of the number of shares held cannot significantly reduce the bank's risk Risk preference.Based on theoretical analysis and empirical conclusions,the policy proposals proposed in this paper include controlling the proportion of the largest shareholder holding shares,actively introducing foreign capital and private capital into banks,reducing government intervention in banks,and improving the bank's information disclosure mechanism.