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The impact of off-balance-sheet regulations on bank risk-taking: Evidence from China.

ABSTRACT: The release of new asset management rules has played a positive role in regulating the asset management business of financial institutions, preventing and controlling financial risk. It has also had an important impact on the management of banks' off-balance-sheet (OBS) innovation. This paper uses unbalanced panel data on 75 commercial banks in China from 2007 to 2017 and combines a theoretical and an empirical model to study the development of bank OBS innovation and bank risk taking from the perspective of new asset management regulations. The analysis finds (1) the rapid development of OBS innovation will increase bank risk taking and (2) the solution to the problem of rigid payment is conducive to reducing the risk taken by Chinese commercial banks when providing OBS innovation.

SUBMITTER: Zhang Q

PROVIDER: S-EPMC7366963 | biostudies-literature | 2020 Dec

REPOSITORIES: biostudies-literature

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The impact of off-balance-sheet regulations on bank risk-taking: Evidence from China.

Zhang Qingjun Q Chen Si S Jin Yi Y

Research in international business and finance 20200717

The release of new asset management rules has played a positive role in regulating the asset management business of financial institutions, preventing and controlling financial risk. It has also had an important impact on the management of banks' off-balance-sheet (OBS) innovation. This paper uses unbalanced panel data on 75 commercial banks in China from 2007 to 2017 and combines a theoretical and an empirical model to study the development of bank OBS innovation and bank risk taking from the p ...[more]

PMID: 34173405

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