The Influence Of Cross-regional Operation Of City Commercial Banks In China

As the name suggests,the City Commercial Banks(hereinafter referred to as "the CCBs")in China has obvious regional characteristics.Therefore,their market positioning is mainly to nserve the local economy,serve the small enterprises,agriculture,rural businesses and farmers,and serve the community".In 2006,the CBRC issued "The Measures for the Institutional Management of Branches in Different Places of City Firms"(No.12[2006]of Bank Supervision And Development),which allows city firms that meet certain regulatory conditions to set up branches in different places based on the principle of "benefiting the best".The regulation was further loosened in 2009.In April 2011,in order to curb the rampant expansion of the CCBs and better control risks,the CBRC decided to be more prudent to promote their trans-regional operation and suspend the approval of trans-regional operation of those with flawed internal control mechanisms.Although the cross-regional operation of the CCBs has gone through the development of "control-liberalization-tightening",in recent years,the CCBs have been "racing around" and expanding rapidly,and the cross-regional operation phenomenon is still increasingly prominent.Building scale by grasping local resources as well as grabbing the resources of other places,the CCBs have become an important banking group on a par with joint-stock Banks.However,just asa fast running train often bears hidden risks,the rapid expansion of the CCBs also brings about some potential dangers.On the basis of reviewing domestic and foreign documents,this paper makes an empirical analysis on the influence of cross-regional operation on the operation performance and risk level of the CCBs.The panel data of 87CCBs from 2010 to 2019 have been collected and sorted out for fixed effect model regression analysis.Meanwhile,inter-bank business has been used as an intermediary variable for Bootstrap analysis,and the heterogeneity of the CCBs has been analyzed according to their sizes and the locations of their headquarters.The empirical results show that(1)the cross-regional expansion of the CCBs is inversely u-shaped in relation to business performance,and u-shaped in relation to risk level.(2)The results of the new intermediary effect test show that inter-bank business has intermediary effects,that is,cross-regional business can affect the business performance and risk level of the CCBs by influencing inter-bank businesses.As for the influence of business performance,the proportion of inter-bank business has some intermediary effects.There is a masking effect on the proportion of inter-bank business affecting the risk level.(3)The results of the heterogeneity analysis show that the measurement results are basically consistent with the measurement results of the original models,which are grouped by large(total assets greater than 200 billion),small and medium-sized(total assets less than 200 billion),as well as by first-tier(and new first-tier)and other cities where the headquarters are located.Among them,the influence of the cross-regional expansion on large CCBs is considerable,while the influence of the first-tier(and new-tier)city group and the small and medium-sized city group on the risk level should be further verified under the circumstance that the inter-regional operation speed of the city business is too fast.In order to better combine theory with practice,this paper analyzes hot issues of risk exposure from the angle of cross-regional operation and the mediation effect of trade business,including the contractor's bank case and the similarity of the current city business risks,and puts forward the proposals of controlling the speed ofthe CCBs cross-regional operation,standardizing trade business regulatory indicators,introducing artificial intelligence and big data to carry out online business,setting up financial management branches,and gradually integrating the partial small city businesses,which hopefully can be referred to in the future.