Central Bank Communication,Bank Leverage And Bank Risk-Taking

Since the 1990s,European and American central banks,including the Federal Reserve,have begun to realize the importance of central bank communication.Information communication is the basic premise to strengthen the central bank’s responsibility.Strengthening information communication is conducive to guiding,managing and stabilizing public expectations,and improving the effectiveness of monetary policy.The financial crisis makes the relationship between monetary policy and bank risk-taking become the focus of monetary policy.In recent years,expected management has become an important means of monetary policy.As a new monetary policy tool,the central bank communication is not riskneutral.Through effective communication,the central bank can guide the risk preference of market players so as to prevent systemic risks and maintain financial stability.This paper studies the relationship between central bank communication,bank leverage and bank risk-taking from the theoretical and empirical levels.First of all,on the basis of summarizing the research of existing scholars,this paper analyzes the theoretical mechanism behind the influence of central bank communication on bank risk-taking.Central bank communication can release the signal of monetary policy stance,so as to guide the public’s expectation of short-term interest rates and determine the final effect of monetary policy to a certain extent.Then,by introducing bank leverage as endogenous variable,this paper analyzes the mechanism that central bank communication influences bank risk-taking by influencing bank leverage.At the theoretical level,it shows that under equilibrium,looser monetary policy stance is usually associated with higher leverage level and expands bank risk-taking.In empirical research,based on the quarterly monetary policy implementation report issued by the People’s Bank of China,this paper uses wording extraction method to construct the central bank communication index.Based on the quarterly data of 16 listed commercial banks in China from 2010 to 2021,this paper uses the mediating effect model and the panel threshold model to empirically analyze the relationship between central bank communication,bank leverage and bank risk-taking,and analyze the threshold effect of central bank communication on bank risktaking.The research results of this paper show that the monetary policy stance released by central bank communication can affect bank leverage and bank risk-taking.The looser the monetary policy signal released by central bank communication is,the higher the bank risk-taking level is.There is a partial intermediary effect in the intermediary effect model constructed in this paper.The bank leverage can be used as an intermediary variable,that is,the monetary policy signal released by the central bank can affect the bank’s risk-taking by acting on the leverage level of the bank.And the impact of the policy signals released by the central bank communication on bank risk-taking has a threshold effect with leverage level as the threshold,indicating that loose central bank communication signals will increase the level of bank risktaking,but the impact of the central bank communication index on bank risk-taking will change due to the difference of bank leverage level.Finally,according to the research results,this paper believes that central bank communication can be used as a monetary policy tool to prevent systemic financial risks and maintain financial stability,and puts forward relevant suggestions on strengthening central bank communication and improving policy effect.