The Impact Of Deposit Competition On The Risk Of Rural Cooperative Financial Institutions

With the relaxation access of rural financial market,rural financial institutions are increasingly diversified,traditional rural financial institutions are more focused on the rural market,the number of new rural financial institutions is increasing,the shareholding banking channel sinks the county,and the competition status of the county rural financial market has changed.The deepening of the marketization of deposit interest rates and the rapid development of Internet financial management have intensified the deposit competition in the rural financial markets of counties.Rural cooperative financial institutions(rural credit cooperatives,rural commercial banks,etc.)are the main force serving the“3 farming”.Due to the high risk of agriculture and the imperfect of rural credit system,the risk of rural cooperative financial institutions is higher,and whether the deposit competition will intensify the risk of rural cooperative financial institutions is the focus of this paper.This paper takes 58 rural cooperative financial institutions in Fujian Province from 2011 to 2017 as a sample,uses the Lerner index to measure deposit competition,and measures the risk level of rural cooperative financial institutions by non-performing loan ratio.By constructing a dynamic panel GMM model,the empirical test examines the impact of deposit competition on the risk of rural cooperative financial institutions from the provincial and regional levels.The results show that from the perspective of the whole province,the deposit competition is significantly positively correlated with the risk of rural cooperative financial institutions,and to some extent supports the theory of competitive fragility hypothesis;from the regional perspective,compared with the southeastern region of Fujian Province,the impact of deposit competition on the risk of rural cooperative financial institutions is more obvious in the northwestern region of Fujian Province.With the increase of rural financial institutions,deposits are financialized,disinterested,and deposit competition is intensifying,rural cooperative financial institutions strive to gain more market share by increasing deposit interest rates,which increases the cost of capital and increases the risk of rural cooperative financial institutions.Therefore,it is recommended that rural cooperative financial institutions should return to their origins,adhere to differentiated operations,strengthen deposit price pricing management,improve risk management,strengthen capital management,and promote credit project construction.