The Differential Development Of Internet Finance And Bank Risk-taking Of Regional Banks

As an important part of our financial system,the role of banking in supporting and regulating the economy is related to the sound and sustainable development of society and economy.After the 19 th session of national congress of the communist party of China,the Central Economic Working Conference stressed that we should resolutely take precautions against and resolve major risks,focusing on the prevention and controlling of financial risks.In recent years,internet finance has achieved leap-forward development,the bank’s liabilities have been diverted,the loans has been crowded out,the third-party payment competition has become increasingly fierce,the pressure of traditional banks from liabilities,assets and customer groups has been increasing,the profit margin has been further compressed,and the operational risk of regional banks has been rising,further affecting the risk-taking behavior of regional banks.Compared with large banks,urban commercial banks and rural commercial banks aiming at small and medium-sized enterprises and individual customers,which is strong coincidence with internet finance,are more receptive to the direct impact of internet finance.The impact of internet finance on risk-taking depends on the development level of internet finance,the response to shocks by banks and the bearable pressure level of banks.The regional banks,which with small scale,short establishment time,single business and weak risk offset,were limited by region.Regional banks are easier to be exposed to risks under shocks,thus increasing the risk-taking level of banks and affecting the stability of the financial industry,which are not conducive to building a multi-level,wide coverage and different banking system.In order to study how the moderating effect between regional differences development in internet finance and individual heterogeneity of banks affects bank risk-taking.Using the method of Hierarchical Linear Model(HLM for short),this paper analyses the impact and heterogeneity of internet financial services on risk-taking of regional banks.Finally,we select z-score to represent bank risk and test the soundness of the conclusions of the study.The main conclusions are as follows:(1)There are sensitive differences in bank risk-taking under the differential development of regional internet financial,and regional internet financial shocks have a significant negative impact on bank risk-taking.For every 1% increase in the internet financial development index,the risk-taking level of banks is reduced by 5.6%.On the whole,internet finance can effectively restrain the risk behavior of regional banks and promote the stability of the financial system.(2)We studies the moderating effect of internet financial development on bank risk-taking from four dimensions: bank innovation,operational efficiency,profitability and interbank liabilities.The research shows that the development of internet finance has significantly strengthened the role of bank innovation and operational efficiency in improving bank risk-taking.The development of internet finance has a positive regulatory effect on reducing the risk level of banks by interbank liabilities,but has no significant regulatory effect on profitability.(3)Internet financial services have different impacts on bank risk-taking.There is a negative correlation between the development of internet payment and internet investment and bank risk-taking.The development of internet monetary fund and internet insurance services will enhance the level of bank risk-taking,and the impact is different.As the development of internet monetary fund services is much earlier than internet insurance services,business development is more mature and influential,and bank risk-taking is more sensitive to the impact of internet monetary fund services.The above conclusions clarify the relationship between internet finance and bank risk-taking and its influence ways.In order to reduce the risk-taking of banks and promote the healthy development of China’s financial system,this paper proposes that the government should vigorously lay out internet finance to promote industrial transformation and upgrading;achieve complementary and coordinated development of traditional finance and internet financial resources;promote the transformation of banks from asset-driven to transaction-driven,improve the quality of assets;play the regulatory role of internet finance and actively build inclusive financial system.reduce credit risk,strengthen risk supervision and other suggestions.