Research On The Influence Of Capital Structure Of Chinese Commercial Banks On Their Liquidity Risk

At present,China has entered a new stage of development,and in the face of a sluggish international economic environment,how to promote sound and rapid economic development in China has become a crucial issue.As the pillar of China’s financial system,commercial banks have become particularly important in maintaining the stability of the banking system.Since the outbreak of the global economic crisis in 2008,China has formulated various measures such as the "Capital Management Measures for Commercial Banks(Trial)" to ensure the healthy development of commercial banks.In the past,domestic and foreign banks such as Hainan Development Bank and Baoshang Bank and Bank of Silicon Valley that went bankrupt due to insufficient liquidity were everywhere.Therefore,studying the impact of capital structure on the liquidity risk of commercial banks in China is conducive to the stable and healthy development of the banking system and even the entire financial system.This study first reviewed the theoretical basis of the capital structure and liquidity risk of commercial banks in China,explained relevant concepts and theories,and organized the current relevant policies in China;Secondly,Capital adequacy ratio and shareholders’ equity ratio are used to replace capital structure,liquidity ratio and deposit loan ratio are used to replace liquidity risk to analyze the development status of capital structure and liquidity risk of commercial banks,and put forward the mechanism analysis and characteristic facts that bank capital structure affects liquidity risk;Then we use the ratio of shareholders’ equity and Capital adequacy ratio to represent the capital structure,and use the comprehensive measurement indicators of liquidity risk to represent the liquidity risk of banks.We use the fixed effect model to empirically analyze the impact of the capital structure of China’s commercial banks on liquidity risk,and draw empirical conclusions accordingly: there is a significant negative correlation between the ratio of shareholders’ equity and liquidity risk;There is also a significant negative correlation between Capital adequacy ratio and liquidity risk,and then robustness test and two heterogeneity tests are used to prove the rationality of the above conclusions.Finally,the conclusion of this study is summarized: for 32 commercial banks as a whole,Capital adequacy ratio and shareholders’ equity ratio are significantly positively correlated with the comprehensive liquidity risk measurement indicators,that is,they are significantly negatively correlated with liquidity risk,that is,the improvement of both will reduce the liquidity risk of commercial banks;For commercial banks of different natures,the Capital adequacy ratio and the ratio of shareholders’ equity to liquidity risk are also negatively correlated,that is,the improvement of the two will reduce the liquidity risk of commercial banks.The significance of the ratio of shareholders’ equity to liquidity risk is from high to low: state-owned commercial banks=urban commercial banks>rural commercial banks>joint-stock commercial banks;The significance of Capital adequacy ratio on liquidity risk from high to low is: joint-stock commercial banks=urban commercial banks>rural commercial banks>state-owned commercial banks;For commercial banks in different periods,the increase of Capital adequacy ratio and shareholders’ equity ratio will still reduce the liquidity risk of banks,but with the impact of the crisis,banks may have run risk,which will lead to the decrease of liquidity and increase of liquidity risk of commercial banks.In summary,the capital structure of commercial banks in China has a significant impact on liquidity risk.Then,propose countermeasures and suggestions to improve the capital structure and liquidity level of commercial banks in China: strive to expand financing channels and increase the proportion of equity investment;Expand the issuance scale of convertible bonds and encourage holders to convert into equity;Actively adjusting asset structure to reduce high risks...