Research On The Impact Of Interbank Liquidity Creation On Bank Risk-taking

In China,with the gradual advancement of interest rate marketization,the deposit and loan interest margin of commercial banks has narrowed,and its traditional profit model has been greatly challenged.In order to achieve the goal of maximizing profits,many banks turn to inter-bank businesses with more profits and greater risks,and use liquid liabilities to match non liquid assets.It is also in the form of term mismatch that they provide funds to enterprises and continuously provide liquidity to the market.With the rapid development of interbank business,banks earn huge profits.At the same time,they are also facing a series of problems such as term mismatch and non-standard business.The liquidity risk and credit risk of banks are increasing.Therefore,it is necessary to deeply explore the impact of interbank liquidity creation on bank risk-taking.Based on the existing theories,this paper selects 134 banks in China and systemically important banks at home and abroad as the research samples,selects Z value as the proxy variable of bank risk-taking,takes the percentage of interbank liquidity creation in total bank assets as the explanatory variable,and uses the fixed effect model to study the impact of interbank liquidity creation on bank risk-taking.The final empirical results show that the increase of interbank liquidity creation will lead to the increase of bank risk-taking,and this effect is also different in different banks in China.This is mainly because in China’s commercial banks,different banks have different purposes to participate in interbank business,and there are differences in the distribution proportion of traditional business and interbank business in their business.In addition,by comparing the results of systemically important banks at home and abroad,this paper obtains that each additional unit of interbank liquidity creation brings less risk to domestic banks than foreign banks.Finally,based on the theoretical analysis and impact mechanism analysis,combined with the empirical results of the design model,this paper puts forward practical suggestions from the two dimensions of banking and supervision.From the perspective of commercial banks themselves,these suggestions can correctly guide the development of interbank business to a certain extent and help improve the risk prevention ability of commercial banks;From the perspective of supervision,these suggestions are also helpful for regulators to better supervise the standardization of interbank business of commercial banks,so as to take targeted risk warning measures for banks in time.