A Positive Study of Risk Behavior Based on Dynamic Panel Data

Abstract:

The paper studies risk behavior and capital buffers of Chinas commercial banks under capital regulatory whose core is capital adequacy ratio. We find that the regulatory pressure doesnt significantly affect the risk behavior of commercial banks. It doesnt affect the capital adjustment of commercial banks which have already violated regulatory capital requirement. Whereas, commercial bank which doesnt violate the regulatory requirement but approaching the threshold, will react to this pressure by fine-tuning of supplementary capital to increase its capital adequacy ratio.

• Periodical: Applied Mechanics and Materials (Volumes 522-524)
• Pages: 887-891
• DOI: https://doi.org/10.4028/www.scientific.net/AMM.522-524.887
• Online since: February 2014
• Authors: Kai Qiao Liang
• Keywords: Capital Adequacy Ratio, Capital Buffers, Dynamic Panel Data, Risk Behavior

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