The Empirical Research on the Banking System Procyclicality in Our Country
|School||Southwestern University of Finance and Economics|
|Keywords||economic cycle Bank credit Capital adequacy ratio Pro-cyclic|
Most of the traditional economic cycle theory hold currency neutral concept, that the formation of the economic cycle is not because of the influence of the currency, but emphasizes the practical factors in the formation of economic cycle and the role of conduction. However, with the continuous development of global economy and previous financial crisis, people has more and more awareness and research for the financial role in macroeconomic development.In the1980s, Mr Bernanke and others pioneering research made the financial cycle theory has a breakthrough progress. Financial factors become the significant factor affecting the economic fluctuation. And global financial markets are in constant development and changes, financial tools innovation, financial deregulation and the globalization of financial markets, making the financial impact on the economy is growing, the each other between the two movements, coordinated development of the phenomenon has become increasingly obvious. The pro-cyclicality of financial system is starting to get more and more attention. But more research of the banking system is pro-cyclical, namely bank of credit behavior along with the economic fluctuations and volatility. Mainly displays in the boom, the bank’s credit behavior also active, tend to increase the issuance of loans, so as to further promote the economic growth; In the recession period, the bank’s credit activities also will reduce along with the economic recession, Macro economic entities sector will management dilemma because of the lack of funds, the economic situation worsens. The banking system the pro-cyclicality can bring great influence to the operation of the economy, especially in the economy is in a downturn. Its influence on the recession intensifies sexual will have serious impact on the global economy. The global financial crisis, for example, to a large extent is owing to the influence of the financial system. And after a crisis, the western scholars on the forming mechanism of the financial crisis and the reasons for the in-depth analysis, especially on bank credit and the impact of capital regulation of pro-cyclical had a warm discussion, countercyclical regulatory policy suggestions are put forward.Economy under the impact of the global financial crisis in our country, also affected by the severe, sharp decline, in the second quarter of2008, China’s GDP growth of10.4%, to2009in the first quarter, China’s GDP growth fell to6.6%. A sharp change in the face of economic, China’s state council resolution adopted the4trillion economic stimulus plan, a bank loan scale rapid expansion in China. Loan growth of31.7%in the whole year of2009, is China’s loan growth to the highest level since1998. In under the influence of positive policies and measures, China’s macro economy has begun to rebound, China’s economic growth rate of10.1%in2010. Although compared to the development of the banking system in China and the west, there is a certain gap.China’s regulators to the financial institutions supervision concept also have difference with the western countries. Yet the openness of financial market in China is increasing, the marketization process is gradual, against this background, combining the specific situation of our financial market, studies the pro-cyclicality of our banking system is of great importance. Pro-cyclical behavior in a bank, credit is the most obvious performance pro-cyclicality, mode of operation and the supply of credit by the bank itself, regulatory authorities and the multiple factors influence macroeconomic, so this article from the macro aspect for the whole pro-cyclicality in bank credit, on the basis of empirical analysis, from regulators face a pro-cyclical capital formation also has carried on the empirical research.The formation of the economic cycle has a more profound theoretical basis, and from the aspects of monetary factors on economic cycle is an important aspect of this article focuses on the analysis of the theory. This paper mainly summarized the Hawtrey, Hayek, Schumpeter’s theory of economic cycle. In addition, the commercial banks in its operating also has the pro-cyclical, perform in line with and macroeconomic fluctuations,including Disaster Myopia, Herd instinct, Information asymmetry and System memory, articles of these hypotheses are detailed described. And external aspect, this article selects the cyclical form for Banks has a great influence on fair value accounting, the Basel agreement and financial accelerator theory. Including the pro-cyclicality of Basel2is focus on the content, from the provision of regulatory capital, loan loss provisions, two aspects of the pro-cyclicality of Basel.On the basis of theoretical analysis, using descriptive statistical method and empirical analysis method, we can see that the banking system in our country exists a pro-cyclical effect. And research results show that the state-owned Banks’ capital ratios to present positive correlation with GDP, and the joint-stock commercial Banks present negative correlation relationship.The last part of the article, on the basis of above research, to alleviate our country bank credit pro-cyclicality puts forward several countermeasures.Perspective from the bank, to strengthen the management of bank credit, to prevent the occurrence of herd behavior in the credit decisions, such as irrational investment decisions;, on the other hand, Banks should give full play to its role to promote the development of economy, and enterprises to establish good and long lasting the fact relations, boost the development of the enterprise, especially in the economy is in depression, Banks should strengthen the financial support of relational enterprises, help them out. Finally, because the bank’s loan loss provisions exist in the provision of obvious pro-cyclicality, as a result, Banks can establish counter-cyclical loan-loss provision plan.In terms of regulation, regulatory authorities in our country should establish forward-looking risk measurement method and the dynamic capital regulation policy, reduce the pro-cyclical effects of risk measurement and capital regulation. Additionally establish financial stability, formulate and publish corresponding economic sentiment index, on the real economy departments to the risk of real and comprehensive evaluation, judging on the real economy to run to the bank to provide a reliable reference, can be in a certain extent to reduce bank credit behavior of herding effect, makes credit funds be used reasonably and effectively.