Examining the differences in the impact of Fintech on the economic capital of commercial banks’ market risk: evidence from a panel system GMM analysis

Ting Yao and Liangrong Song

Applied Economics, 2021, vol. 53, issue 23, 2647-2660

Abstract: This article aims to explore the dynamic relationship between Fintech (financial technology) and EC(the economic capital of commercial banks market risk) changes for a sample of 16 listed commercial banks in China. We estimate a balance panel dynamic system Generalized Method of Moment (GMM) approach for the period of January 2011 to September 2019.The article finds that during the sample period, Fintech has reduced the cost of information on both sides of the transaction, increased the transparency of market information, and reduced the EC. It also finds Fintech can provide a large amount of data for commercial banks to conduct market analysis, which makes the procyclicality of commercial banks less than before. Further tests reveal commercial banks have profit-driven preferences, while banks with strong profitability and high asset scale have higher risk tolerance. The impact of Fintech on the EC of different asset sizes commercial banks market risk is different.

Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:taf:applec:v:53:y:2021:i:23:p:2647-2660

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DOI: 10.1080/00036846.2020.1864275

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