Bank risk taking, efficiency, and law enforcement: Evidence from Chinese city commercial banks

2012 ◽  
Vol 23 (2) ◽  
pp. 284-295 ◽  
Author(s):  
Jianhua Zhang ◽  
Peng Wang ◽  
Baozhi Qu
Keyword(s):  
Law Enforcement ◽  
Risk Taking ◽  
Commercial Banks ◽  
Bank Risk ◽  
Chinese City

scholarly journals Does Financial Liberalization Affect Bank Risk-Taking in China?

SAGE Open ◽  
2019 ◽  
Vol 9 (4) ◽  
pp. 215824401988794 ◽  
Author(s):  
Rui Wang ◽  
Hang (Robin) Luo
Keyword(s):  
Law Enforcement ◽  
Risk Taking ◽  
Financial Liberalization ◽  
State Ownership ◽  
Bank Risk ◽  
Bank Stability ◽  
Positive Effects ◽  
Level Data ◽  
Chinese Banks ◽  
Political Conditions

This article examines the effect of financial liberalization on bank risk-taking, using bank-level data of 169 Chinese banks from 2000-2014. Empirical results show that bank stability increases with the development of financial liberalization. We also provide evidence indicating that banks with larger size, longer operating periods, and state ownership are more salient with the development of financial liberalization. However, such positive effects of financial liberalization on bank stability may be weakened by worse macroenvironment gauged by low economic growth, poor law enforcement, and instable political conditions.

Capital regulation and ownership structure on bank risk

2019 ◽  
Vol 28 (1) ◽  
pp. 39-56 ◽  
Author(s):  
Aysa Siddika ◽  
Razali Haron
Keyword(s):  
Maximum Likelihood ◽  
Ownership Structure ◽  
Risk Taking ◽  
Commercial Banks ◽  
Dynamic Panel Data ◽  
Bank Risk ◽  
Capital Regulation ◽  
Content Type ◽  
Global Banking ◽  
The Impact

Purpose This paper aims to examine the impact of capital regulation, ownership structure and the degree of ownership concentration on the risk of commercial banks. Design/methodology/approach This study uses a sample of 565 commercial banks from 52 countries over the period of 2011-2015. A dynamic panel data model estimation using the maximum likelihood with structural equation modelling (SEM) was followed considering the panel nature of this study. Findings The study found that the increase of capital ratio decreases bank risk and the regulatory pressure increases the risk-taking of the bank. No statistically significant relationship between banks’ ownership structure and risk-taking was found. The concentration of ownership was found negatively associated with bank risk. Finally, the study found that in the long term, bank increases the capital level that decreases the default risk. Originality/value This study presents an empirical analysis on the global banking system focusing on the Basel Committee member and non-member countries that reflect the implementation of Basel II and Basel III. Therefore, it helps fill the gap in the banking literature on the effect of recent changes in the capital regulation on bank risk. Maximum likelihood with SEM addresses the issue of endogeneity, efficiency and time-invariant variables. Moreover, this study measures the risk by different proxy variables that address total, default and liquidity risks of the banks. Examining from a different perspective of risk makes the study more robust.

scholarly journals Monetary policy and bank risk-taking in sub-Sahara Africa

2021 ◽  
Vol 18 (1) ◽  
pp. 15-38
Author(s):  
Gabriel Aboyadana
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
North America ◽  
Risk Taking ◽  
Commercial Banks ◽  
Bank Risk ◽  
Limited Attention ◽  
Monetary Authorities ◽  
Different Types ◽  
Policy Impacts

Monetary policy has been shown to influence the risk-taking behaviour of banks in Europe and North America. Africa has however received limited attention in this regard. This study contributes to the monetary policy and bank risk-taking literature for sub-Sahara Africa by examining a panel of commercial banks from 2001-2015 for different types of risks. We find that monetary policy significantly influences bank risk-taking both statistically and economically, but the effect differs across the types of risks. Bank size and profitability are important in determining how effective monetary policy impacts risk-taking. The effects are stronger for countries without exchange rate controls. In terms of policies, monetary authorities intending to pursue expansionary monetary policy must remedy the risk-taking response by banks.

scholarly journals The Impact of Cross-Border Capital Flows on the Chinese Banking System

SAGE Open ◽  
2021 ◽  
Vol 11 (2) ◽  
pp. 215824402110214
Author(s):  
Yang Zhao ◽  
Zichun Xu
Keyword(s):  
Risk Taking ◽  
Capital Flows ◽  
Commercial Banks ◽  
Generalized Method Of Moments ◽  
Bank Risk ◽  
Capital Account ◽  
Political Condition ◽  
Positive Effects ◽  
Cross Border ◽  
The Impact

With the accelerated opening of China’s capital account, China’s banking sector is exposed to the impacts of cross-border capital flows. This article explores the impact of cross-border capital flows on banks’ risk-taking in China. Employing bank-level data of 50 Chinese commercial banks from 2005 to 2018 and a sys-GMM (system generalized method of moments) estimation method, we show that cross-border capital flows are positively associated with the risk-taking of Chinese commercial banks. Moreover, banks that are larger, more capital adequate, and more profitable are more sensitive to the degree of capital account openness toward risk-taking, and the capital account openness has the greatest influence on the profitability-driven bank risk-taking. Nevertheless, such positive effects of capital account openness on bank risk-taking may be weakened under bad macro-environment, indicated by low economic growth, poor legitimate law enforcement, and unstable political condition.

scholarly journals Economic Fluctuation, Local Government Bond Risk and Risk-Taking of City Commercial Banks

2021 ◽  
Vol 13 (17) ◽  
pp. 9871
Author(s):  
Changjun Zheng ◽  
Shiying Chen ◽  
Zhenhuan Dong
Keyword(s):  
Local Government ◽  
Risk Taking ◽  
Commercial Banks ◽  
Banking Sector ◽  
Government Debt ◽  
Bank Risk ◽  
Government Bond ◽  
Economic Fluctuation ◽  
Bond Risk ◽  
The Impact

Countercyclical fiscal regulation can mitigate economic risk, but this is bound to increase the scale of local government debt during an economic downturn, and then spread risk to the banking sector, forming potential financial instability factors. We extracted the three most important variables in this process: economic fluctuation, local debt risk and bank risk-taking to build an econometric model and found that: (1) both economic fluctuations and local government bond risks have a significant impact on bank risk-taking, which is negatively correlated with local economic growth, while the increase of local government bond risks tends to increase bank risk-taking in the long run; (2) the impact of local government debt risk significantly increases the loans of city commercial banks flowing into the construction industry. Therefore, the impact of local government bond risk on city commercial banks is concentrated in the impact on their construction loans. This study has an important reference value for timely and moderate countercyclical regulation, preventing local debt risk from spreading to banks, constructing a sustainable local government−bank ecology, and promoting sustainable economic development.

Sign in / Sign up

Export Citation Format

Share Document