TITLE:
Shadow Banking, Interest Rate Marketization and Bank Risk-Taking: An Empirical Study of the 40 Commercial Banks in China
AUTHORS:
Jing Luo
KEYWORDS:
Shadow Banking, Interest Rate Marketization, Risk-Taking, Industrial Diversification
JOURNAL NAME:
Journal of Financial Risk Management,
Vol.6 No.1,
March
1,
2017
ABSTRACT: Based on the panel data of 40 Commercial Banks in China during 2006-2014, this paper makes an empirical study on the relationship between shadow banking, interest rate marketization and bank risk-taking by using the system GMM model. The study found that the development of the shadow banking and the interest rate marketization is conducive to the diversification of banks’ business, thereby reducing the risk of banks. The study also found that “too big to fail” and periodic are the characteristics of commercial bank risk.