Research On The Impact Of New Financial Instrument Standards On The Profitability Of Commercial Banks

In 2017,according to the revision of international standards on financial instruments,China’s Ministry of Finance revised and promulgated the domestic accounting standards accordingly,making China’s financial accounting standards comply with relevant international regulations,further ensuring the perfection of China’s financial accounting standards and realizing the convergence with international accounting standards.Main revisions:first,the classification of financial assets is changed from the current "four classifications" to "three classifications",which reduces the impact of human factors on the classification of financial assets and improves objectivity.The classification is processed and analyzed as a whole to ensure consistency and scientific classification methods.Second,it has changed the method of withdrawing the impairment of financial assets,more fully and timely withdraw the provision for the impairment of financial assets,and prevent the credit risk of financial assets;Third,revise hedge accounting and expand the scope of accounting,so as to ensure that its risk management activities can be reasonably reflected.Taking the new financial instrument standards from 2014 to 2018 as the research goal,this paper discusses the impact of the new financial instrument standards on the profitability of commercial banks.Different from the previous studies,this paper uses the analysis methods of double difference and propensity matching score to explore the impact of the new financial instrument standards on the profitability of commercial banks in China.This paper analyzes the mechanism of the new financial instrument standards under the influence of heterogeneity from the perspective of property right nature,industry nature,uncertainty of monetary policy and cross cyclical economy,and explores the impact of the new financial instrument standards on the profitability of commercial banks under the effect of risk sharing and intermediary business.The results show that the implementation of the new financial instrument standards can promote the profitability of commercial banks;Among them,the profitability of commercial banks is transmitted by risks,intermediary business and enterprise innovation ability.The implementation of the new financial instrument standards is conducive to promoting the innovation ability of commercial banks.The development and increasing of intermediary business mode of commercial banks can effectiviely promote the profitability of banks.This paper carries out research hypothesis design,through empirical analysis,combined with the previous research views as the reference basis,takes the new financial instrument standards as the explanatory variable,and considers the impact of the new financial instrument standards on the profitability of domestic commercial banks under the premise of heterogeneity factors,so as to further test the robustness,Using variable replacement and average lag of new financial instrument standards for one period as instrument variables for two-stage regression,and using propensity matching score method as endogenous test tool,this paper analyzes the relationship between the impact of new financial instrument standards and commercial banks’ profits under the influence of risk sharing and intermediary business intermediary variables.The implementation of new financial instruments improves the profitability of commercial banks,and it is found that there are significant differences under heterogeneity.The uncertainty of monetary policy and cross cycle adjustment will have an impact on the profitability of commercial banks.The reason for its high profitability comes from the improvement of non interest income such as intermediate business service fees brought by the new financial instrument standards.At the same time,compared with commercial banks that have not implemented the new financial instrument standards,commercial banks with the new financial instrument standards usually hold less equity capital.