Isaac Scientific Publishing

Journal of Advances in Economics and Finance

International Capital Flow, Monetary Policy and Commercial Bank Risk Taking——An Empirical Analysis Based on China's Commercial Banks

Download PDF (263.1 KB) PP. 117 - 122 Pub. Date: August 1, 2019

DOI: 10.22606/jaef.2019.43004

Author(s)

  • Ao Chen*
    College of Economics, Jinan University, Guangzhou, China

Abstract

In order to study the impact of international capital flow, monetary policy on commercial banks’ risk-taking, this paper uses the unbalanced panel data of 48 banks in China from 2004 to 2018 China as the research sample. The GMM estimation method is used in the empirical test, empirical results show that (1) Both quantitative-based and price-based monetary policy have a significant impact on the stability of commercial banks in China. Loose monetary policy weakens the ability of commercial banks to identify and assess risks, which increases their risk-taking level. (2) The international capital flow index has a significant impact on the stability of China's commercial banks. International capital flows will increase bank risk levels and significantly reduce the stability of commercial banks, and vice versa. (3) Under the combined effect of interest rates and international capital flows, the robustness of commercial banks has been significantly magnified.

Keywords

International capital flow, monetary policy, commercial bank risk-taking

References

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