The Research On The Impact Of The Net Stable Funding Ratio On The Profitability Of Chinese Commercial Banks

In December 2010,the Basel committee issued Basel III agreement,which joined the net stable funding ratio and liquidity coverage ratio as new indicators.The new standards required regulators to assess and measure Banks' liquidity conditions more comprehensively and rationally.The Basel committee completed the final revision in 2014 after a series of revisions to the new liquidity indicators,which are difficult to measure due to the different actual conditions of banks in different countries.Following the pace of international regulators,China banking regulatory coimmission proposed the calculation standards and requirements related to NSFR and LCR in 2011.Since the international department is still in the process of revising NSFR indicators,relevant requirements on net stable capital ratio were removed in 2013,and NSFR was re-incorporated into the liquidity supervision system of China's banking industry until December 6,2017.On December 6,2017,the CBRC issued the "measures for the management of liquidity risk of commercial Bank.s"(revised draft for comments),which officially incorporated the net stable capital ratio into the liquidity supervision system.Therefore,as commercial Banks implement the new liquidity regulatory requirements,it is necessary to study the impact of the implementation of this indicator on commercial Banks.In the theoretical part,this paper introduces the process of puuting forward and revising the ratio of net stable capital,the calculation method of the index at home and abroad,and the influencing mechanism of the regulation of the ratio of net stable capital on Banks' profitability.In the stage of empirical research,this paper used the micro data of 35 commercial Banks from 2006 to 2015 and the method of systematic generalized moments estimation to empirically study the impact of net stable capital proportion regulation on the profitability of commercial Banks,and reached the following conclusions:First,the NSFR in China's banking system has basically met the regulatory standards,but the overall liquidity level is in a downward trend.Second,the regulation of net stable capital ratio can significantly increase the rate of return on loan assets of state-owned Banks,while the impact on the loan assets of joint-stock banks and urban commercial banks is negative,but the result is not significant.Third,the increase inNSFR can reduce the income level of interest-bearing assets,which is significant for state-owned banks,joint-stock banks and urban commercial banks.Fourth,the empirical results show that the overall regulation of net stable capital ratio can improve the profitability of the unit assets of commercial banks and has the strongest effect on the state-owned Banks.According to the research results of this paper,the following countermeasures are proposed:the government and the regulatory authorities should establish differentiated liquidity supervision standards for different situations,reduce the impact of new flow indicators on small and medium-sized Banks,and ensure that the bank's term conversion risk is within a certain control range;We will strengthen enforcement and information disclosure and accelerate the development of a credit rating system.For commercial banks,actively expand financing channels and consolidate customer deposits;Change the traditional profit model to accelerate the development of non-interest business;Perfect information management system and strengthen risk control.