Research on the Impact of Heterogeneous Leverage Regulation on the Risks of China’s Commercial Banks

Authors

  • Zou Wei
  • Liu Tao

DOI:

https://doi.org/10.18002/sin.v11i2.6912

Keywords:

leverage regulation, heterogeneity, bank risk

Abstract

Based on the panel data of 75 commercial banks in China from 2008 to 2017, this paper
uses four methods: mixed estimation, fixed effect, differential moment estimation and system moment
estimation, to examine the impact of leverage ratio regulation on commercial bank risks and the
influence of heterogeneity of commercial banks on regulatory effectiveness. We found that, first, the
supervision of leverage ratio effectively reduces the risks of Chinese commercial banks; second, the
heterogeneity of Chinese commercial banks will lead to differences in regulatory effects. For banks
that are listed with lower capital levels and have higher risk preference, leverage ratio regulation
has a stronger inhibitory effect on bank risks. On this basis, it is recommended that the regulators
implement differentiated supervisory measures for commercial banks with different capital levels and
risk reference while strengthening supervision of leverage.

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Author Biographies

Zou Wei

School of Business
Xiangtan University
Xiangtan, Hunan, China 411105

Liu Tao

School of Business
Xiangtan University
Xiangtan, Hunan, China 411105

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Published

2021-02-22

How to Cite

Wei, Z., & Tao, L. (2021). Research on the Impact of Heterogeneous Leverage Regulation on the Risks of China’s Commercial Banks. Sinología hispánica. China Studies Review, 11(2), 157–174. https://doi.org/10.18002/sin.v11i2.6912

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Artículos