 Macro-prudential policy, digital transformations and banks’ risk-takingYongkui Li, Qixuan Du, Xiangrui Chao and Xiang Gao The Quarterly Review of Economics and Finance, 2024, vol. 98, issue C Abstract: This study examines the influence of macro-prudential policies on risk-taking among systemically important banks using unbalanced panel data from 126 commercial banks in China between 2010 and 2021. Under a difference-in-differences setup, the empirics demonstrate that macro prudence in China effectively enhances large banks’ risk prevention measures and risk-mitigation efforts. Specifically, macro-prudential policy implementation facilitates the digital transformation of banking and subsequently reduces risk-taking behavior. According to heterogeneity test results, the concerned effect becomes more significant for systemically important banks having higher capital adequacy ratios. Moreover, the most important banks with strong interbank dependence exhibit more pronounced changes in risk profiles responding to stricter capital supervision requirements. Our findings shed light on the economic consequences of monitoring strengthening from the perspective of regulatory authorities. Keywords: Macro-prudential policy; banks’ digital transformation, systemically important banks; risk-taking; difference-in-differences model (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:quaeco:v:98:y:2024:i:c:s1062976924001479 DOI: 10.1016/j.qref.2024.101941 Access Statistics for this article The Quarterly Review of Economics and Finance is currently edited by R. J. Arnould and J. E. Finnerty More articles in The Quarterly Review of Economics and Finance from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.