Research On The Impact Of Financial Industry Opening On Bank Risk-Taking

In recent years,the world financial situation has been increasingly complicated,and the international economic recovery and development are confronted with the dilemma of imbalance.Based on the current change,China is actively and steadily working on the gradual deepening of economic recovery and the opening up of financial industry,It is imperative to prevent financial risks if we want to achieve highlevel and multi-level opening of the financial industry and help the steady economic development.As an important pillar of the financial industry,the risk level of banks is related to the stability of the whole financial system and even social development.Under open conditions,the instability and preventive measures of the banking system are more complex than the closed banking system.Therefore,based on the grasp of the financial situation and the reality of our country,this paper discusses the risk behavior of banks under the background of financial opening,which is of great significance for promoting the steady operation of banks,preventing systemic risks and maintaining financial stability.Specifically,on the one hand,this paper analyzes the current situation of the financial industry opening affecting the risk-taking of banks.Specifically,first summarize the relevant literature,sort out the financial industry open influence bank risk interest rate channel,exchange rate channel,asset price channels,secondly,based on the contingent equity analysis(CCA)measure the default distance of the banking system as a proxy index of risk bearing of the banking system,and build a timechanging perspective of TVP-VAR model,analyzes the financial industry since 2007-2020,bank risk bearing and interest rates,exchange rate and asset prices.On the other hand,a dynamic panel model is established in the paper to analyze the connection between the two,and based on the benchmark model,the financial industry opening and bank categories are analyzed to investigate whether the influence direction changes when the financial industry opening is subdivided on the category? In the bank subsample regression,this paper tests the sub-sample of different categories of banks to see whether the impact presents different results according to different bank categories.Finally,this paper examines the intermediary effect of bank spreads and capital regulation as supplementary studies.Based on the current situation analysis and empirical research,this paper draws the following conclusions:(1)From 2007 to 2020,the impact of China’s financial industry opening on bank risk taking was mainly short term,and the impact that tends to be medium or long term was not large.During the short time,positive fluctuations of asset prices will lead to negative change in default distance and bank risk.During the medium time,the default distance of banking system would receive reverse impact from interest rates,increasing the risk-taking level of the banking system.(2)It was the opening of financial industry that promotes the risk-taking behaviors of commercial banks.The conclusions remained consistent when distinguishing between the different directions.When the opening of the financial industry is subdivided,it is found that the deregulation of the capital inflow of securities investment plays a greater role in promoting bank risks.(3)The opening of the financial industry has different results on the risk behaviors of different types of banks.As for the banks that are state-owned or joint-stock,this impact is negative,but for relatively small urban commercial banks,this impact is positive.(4)Bank interest rate spread bears part of the intermediary effect of the opening of the financial industry on the risk bearing of banks,while internal opening of financial system has its positive effect on the regulations against the impacts on the risk-taking of banks caused by the opening of financial industry.However,in the “going out” of the financial industry opening,the intermediary effect of bank interest rate spread is not obvious.(5)The improvement of the level of capital supervision significantly increases the role of the opening of the financial industry in promoting the risk bearing level of commercial banks,particularly those urban commercial banks.While,as for the banks that are state-owned and joint-stock,capital supervision plays a negative regulating role in affecting the opening of the financial industry on the risk-taking of banks.Based on this,this paper offers following proposals:(1)Improve the quality of the financial industry opening up.Enhance the soft power of the opening of the financial industry,constantly improve the investment and financing environment of the domestic financial market,and promote the facilitation and standardization of financial investment.(2)Improve the risk prevention and control system of commercial banks.Establish a dynamic risk identification and monitoring mechanism to guide international capital to enter the domestic financial market in an orderly manner.Improve the early correction and late market exit mechanism of high-risk banks,and implement differentiated management according to the heterogeneity of banks.(3)Innovate the business philosophy of banks and create a diversified income pattern.Change the traditional business philosophy of relying on the bank’s profit margin,expand banking business channels and income sources,and constantly improve the product pricing system.(4)Strengthen the bank’s capital replenishment ability and make it more flexible.By optimizing the management method of the combination of risk supervision and bank capital,let the bank dynamically adjust its own business strategy.