Research On The Influence Of Resident Leverage Ratio On Financial Risk

The excessive leverage of US residents caused the bursting of the real estate bubble and triggered the global financial crisis in 2008,which led to the increasing importance of household leverage in various countries.In recent years,China’s resident leverage has shown a rising trend,according to the Bank for International Settlements data show that in 2008,China’s resident leverage ratio is only 17.9%,less than the level of emerging market economies,but by the third quarter of 2022,China’s resident leverage rose to 61.4%,far more than 45.7% of emerging economies,and close to 70%of developed economies.Experiencing the impact of the new coronavirus epidemic on the domestic economy,China’s real estate industry has suffered a bitter winter at this stage.According to the data of the National Bureau of Statistics,the added value of the real estate industry in 2022 decreased by 5.1% year-on-year,the largest decline in all industries,while the real estate industry is associated with financial risks and resident leverage.Firstly,the debt financing of the real estate industry mainly comes from the commercial banking system,which is related to the risks of China’s financial system.Secondly,most of the residents’ purchase funds are obtained through mortgage loans,so most of the purchase funds are residents’ leveraged funds.Therefore,in order to further implement the stable real estate policy,it is necessary to study the variables of residents’ leverage and financial risk and how to transmit them in real estate and other channels.This paper studies financial risk from the perspective of residents’ leverage,which can provide decision-making reference for the formulation of residents’ leverage ratio regulation policies and the prevention of financial risks.First of all,on the basis of combing domestic and foreign literature,this paper explores the theoretical mechanism of the impact of household leverage on financial risk,and studies the transmission path of household leverage on financial risk from the real estate channel and corporate debt channel.Then,provincial panel data of 30 provinces in China from 2005 to 2021 are selected to empirically test the impact of household leverage on financial risk.It is found that there is a U-shaped relationship between resident leverage and bank credit risk,and a positive relationship between resident leverage and asset price risk.In terms of regional heterogeneity,resident leverage in eastern China is more sensitive to financial risk than that in central and western China,and has higher risk resistance.When verifying that household leverage affects household leverage through different channels,this paper draws on previous literature research practices and uses the intermediary effect model to separately verify the real estate channel and corporate debt channel in which household leverage affects financial risk.Among them,the intermediary effect on bank credit risk is partial,while the intermediary effect on asset price risk is not significant.Finally,this paper puts forward that the supervision of residents’ leverage ratio should be adapted to local conditions,and the policies of reducing or stabilizing leverage should be adopted according to different economic development conditions.Meanwhile,the regulation and control of real estate and the supervision of corporate debt should not only comply with market rules,but also make timely use of government regulation and intervention.