Capital Supervision, Information Disclosure and Risk-taking—Evidence from Rural Commercial Banks in China

Wenli Wang, Jing Zhang and Yunpeng Wang

Emerging Markets Finance and Trade, 2022, vol. 58, issue 8, 2273-2289

Abstract: Based on yearly data of 44 rural commercial banks in China from 2012 to 2019, this research empirically investigates the impact of capital supervision and information disclosure on the risk-taking of rural commercial banks, and further explores the mechanisms through which capital supervision affects the risk-taking of said banks. The empirical results show that both capital supervision and information disclosure negatively affect their risk-taking. Moreover, the test of the mechanism suggests that capital supervision influences rural commercial banks’ risk-taking through indirectly changing lending behavior. Our study offers important policy implications for regulators to reduce the risk-taking of rural commercial banks.

Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:mes:emfitr:v:58:y:2022:i:8:p:2273-2289

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DOI: 10.1080/1540496X.2021.1971076

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