Bank risk-taking and monetary policy transmission: Evidence from China

Arbeitspapier

We study the impact of China's 2013 implementation of Basel III on bank risk-taking and its responses to monetary policy shocks using confidential loan-level data from a large Chinese bank. Guided by theory, we use a difference-in-difference identification, exploiting cross-sectional differences in lending behaviors between highrisk and low-risk bank branches before and after the new regulations. We find that, through a risk-weighting channel, changes in regulations significantly reduced bank risktaking, both on average and conditional on monetary policy easing. However, banks reduce risk-taking by increasing lending to ostensibly low-risk state-owned enterprises (SOEs) under government guarantees, despite their low average productivity.

Angaben zum Objekt

• ISBN: 978-952-323-390-4
• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: BOFIT Discussion Papers ; No. 15/2021

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Monetary Policy ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Financial Institutions and Services: Government Policy and Regulation
• Thema: bank risk-taking ; banking regulations ; risk-weighting ; monetary policy ; difference-in-difference ; China

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Li, Xiaoming ; Liu, Zheng ; Peng, Yuchao ; Xu, Zhiwei
• Ereignis: Veröffentlichung
• (wer): Bank of Finland, Bank of Finland Institute for Emerging Economies (BOFIT)
• (wo): Helsinki
• (wann): 2021

Weitere Informationen

• Handle: http://hdl.handle.net/10419/249604
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ