Abstract:
Continued development of the financial products market, has a considerable degree of impact on China's financial. At the same time, the interest rate liberalization is constantly advancing in the process. However, there’s still lack of researches of the effects that how do financial product and interest rate liberalization influence bank industry, especially of bank risk-taking. This paper will use the panel data of China’s 100 commercial banks in 2005-2014, and comprehensively analyze the impact of financial products and interest rate liberalization on the risk of China’s banks. Drawing the conclusions: (1) the search-for-yield effect of financial products has a significant negative impact on bank risk, and strengthen the effect of monetary policy stance; (2) the interest rate liberalization positively impact bank risk taking by promoting bank competition, expansion chance to take risk, and thus enhance the effect of monetary policy stance; (3) impact that financial products affect risk-taking of bank will be weaken by interest rate liberalization, and strengthened if monetary policy stance become loose. The joint effect of three factors will be positive to risk-taking of bank.
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