Analysis Of The Impact Of Leverage Rate On The Operation Efficiency Of China’s Commercial Banks

As an indispensable part of the financial system,commercial banks have an important impact on China’s economic development.The stability and security of the banking system management is conducive to the rational and effective allocation of social funds and resources in China.The high leverage of financial institutions has been highlighted in the financial crisis that erupted in 2008.The Basel Committee realized that in the past,when it was supervised by a single capital adequacy regulatory indicator,the risk of off-balance sheet assets was not taken seriously by the regulatory authorities,which led many banks to use this for regulatory arbitrage.In order to make up for the shortcomings of the past regulatory system,Basel Ⅲincorporates leverage as a new regulatory tool to limit risks inside and outside the bank.On the basis of reference to international regulatory standards,China’s regulatory agencies have proposed a 4%leverage regulation standard,slightly higher than the international 3%regulatory standards.The operating efficiency of commercial banks directly reflects their operating conditions.As a new regulatory tool,leverage ratio will inevitably affect the efficiency of commercial banks.Too strict leverage requirements will reduce the credit resources available to banks,which is not conducive to banks’ business development,hinder the development of the banking industry,and is not conducive to the development of China’s market economy.Too low a leverage ratio,although it can increase the profitability of commercial banks,but also increase the operational risks of commercial banks,which is not conducive to the long-term sustainable development of commercial banks.At the same time,the risk accumulation of the banking system will pose a great threat to the stability of the macro economy.Therefore,it is guaranteed that the leverage ratio of the bank is above certain standards and has a certain preventive effect on the possible systemic risks.In summary,trade-offs between financial stability and market efficiency should be made.On the one hand,commercial banks should not ignore stability and security,paranoid use of leverage to expand,blindly pursue the growth of profits.On the other hand,regulators should not simply increase leverage to maintain absolute stability in financial markets.In other words,there must be an appropriate level of leverage or a reasonable range to balance the efficiency of commercial banks and the stability of the economy,and to maximize efficiency under financially stable conditions.This paper analyzes the influence of leverage ratio on the operational efficiency of China’s commercial banks from the perspective of leverage ratio,and explores the optimal leverage ratio of China’s commercial banks.The research results show that there is a significant nonlinear relationship between the leverage ratio of listed commercial banks and their operating efficiency.This paper first expounds the theory of leverage ratio and leverage regulation,analyzes the difference between leverage ratio and capital adequacy ratio from multiple aspects,affirms the necessity of introducing leverage index,and 18 listed commercial banks in China in recent years.A simple analysis of the trend of leverage changes.Through statistical analysis,it is found that the level of leverage of commercial banks in China is generally above the level of regulatory requirements,and it is increasing year by year.From the perspective of the three types of banks,there are still some differences in the leverage ratios of different types of banks,but the differences are gradually narrowing.Secondly,this paper elaborates on the relevant theories of commercial bank efficiency,and selects the variable return data envelope model to measure the efficiency of 18 listed commercial banks in China in 2007-2018,and carries out various efficiency of different types of banks.Comparison and analysis.Since the technical efficiency of the DEA model measurement considers the management and scale factors of the research object more comprehensively,the operational efficiency mentioned in this paper refers to the technical efficiency measured by the DEA model.At the same time,pure technical efficiency and scale efficiency are regarded as two ways to influence the final efficiency.Finally,based on the above analysis,a panel linear model is constructed to quantitatively analyze the specific relationship between leverage and efficiency.The results show that there is no simple linear relationship between the leverage ratio and the operating efficiency of listed commercial banks in China,but the non-linear relationship of inverted U-shaped.Explain that there is a level of leverage that optimizes the bank’s operating efficiency.Based on this,the panel threshold regression model is further established to analyze the nonlinear effect of the leverage ratio by interval regression analysis,and the interval effect of the leverage effect on the bank’s operating efficiency is obtained.Finally,it summarizes the specific process and conclusions of this paper,and based on the conclusions,it puts forward suggestions from both supervision and the bank itself,in order to better coordinate the relationship between leverage regulation and bank efficiency,and promote the scientific and rationalization of supervision.It will enable commercial banks to find a reasonable level of leverage in their operations,maximize efficiency and help them profit.