CAPITAL REQUIREMENT AND LOAN SUPPLIERS OF THE REGIONAL BANKS IN CHINA

Dai Jianzhong ()
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Dai Jianzhong: School of Business, Nanjing University, Nanjing, Jiangsu, China

The Singapore Economic Review (SER), 2017, vol. 62, issue 04, 837-858

Abstract: This paper tries to check whether capital requirement policy has significant influence on bank loan growth by using a sample of regional banks in China from 2005–2008. The paper develops a simultaneous equation models to analyze the endogenous relationship between capital changes, loan growth and non-performing loans. The paper finds that during the sample years, capital condition indeed became a strict constraint for the loan growth of these banks This constraint also became more and more strict and significant across the sample years as the implementation of the policy carried on.

Keywords: Capital adequacy ratio; China; Loan supply; Non-performing loan; Regional banks; simulataneous equation model (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1142/S021759081740029X

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