Regulation of Leverage Ratio, Credit Expansion and Credit Risk of Commercial Banks

摘要

“Basel III” and “Measures for the Administration of Capital of CommercialBanks” propose to use leverage ratio as a supplement to capital adequacy ratio.Leverage ratio supervision and capital adequacy ratio supervision jointlysupervise and manage commercial banks. Theoretically, leverage ratio regulationcan inhibit the credit expansion of commercial banks and improve bankstability. However, it is also possible to increase the risk preference ofcommercial banks, and increase the proportion of high-risk assets. It cangenerate adverse selection problems, and increase the credit risk of commercialbanks. This paper selects the data of 16 listed commercial banks in China from2013 to 2018. The empirical results show that leverage ratio regulation willinhibit the credit expansion of commercial banks, but it will increase thecredit risk of commercial banks. It has different impacts on different types ofcommercial banks.