Impact of Macroprudential Regulation on Regulatory Arbitrage Through Interbank Business
The Central Financial Work Conference held in October 2023 stressed comprehensively strengthening financial supervision and preventing and resolving risks to effectively improve the effectiveness of financial supervision and bring all financial activities under supervision in accordance with the law in the current and future periods. Financial institutions gain arbitrage space by avoiding regulation in the game with financial regulation, and the interbank business of commercial banks in China, by concealing credit assets, has become an important means for banks to avoid microprudential regulation and achieve regulatory arbitrage since the 2008 financial crisis. The macroprudential regulatory policy, which aims to prevent systemic financial risks, can effectively prevent regulatory arbitrage of financial institutions in theory. Improving the macroprudential policy framework has become an important issue in financial regulatory practice and reform worldwide.This paper studies the impact of the implementation of China's macroprudential regulatory policies on regulatory arbitrage through the interbank business of commercial banks. The empirical study analyzes the impact of microprudential regulatory pressure on the changes in the interbank business of commercial banks. Then, the macroprudential regulatory pressure indicator is added to the model to analyze the impact of macroprudential regulatory pressure on commercial banks' regulatory arbitrage. The empirical conclusion shows that macroprudential regulation can effectively prevent commercial banks from evading financial regulation through interbank business to a certain extent, but the policy effects differ between the net asset party and the net liability party of interbank business. This paper mainly expands on the previous research in the following aspects. It collects micro financial data from commercial banks to construct interbank business indicators. By analyzing the business models of commercial banks hiding and nesting credit assets through interbank business, as well as the changes in the interbank business scale when facing microprudential regulatory pressure, it depicts the motivation of commercial banks to avoid microprudential regulation through interbank business. This paper partially reveals the behavior pattern of commercial banks engaging in financial regulatory arbitrage through interbank business, and analyzes the effects of China's macroprudential regulatory policies from the perspective of regulatory arbitrage against the backdrop of intensified financial regulation as a primary focus of financial work. It also puts forward targeted policy recommendations.
万方数据
维普
