Systemically Important Banking System and Liquidity Creation—Quasi-Natural Experiment Evidence from Commercial Banks in China
Systemically important banks have the characteristics of large scale,high complexity,and strong correlation,exerting significant influence on the financial system.Liquidity creation is a means for commercial banks to serve the real economy,as well as an important reference for measuring whether commercial banks play the role of financial intermediation.Therefore,it is of great significance to study the impact of the systemically important banking system on liquidity creation.This article collects unbalanced panel data from 174 commercial banks in China from 2015 to 2022 as the research sample,with the systemically important banking system in China as the research object.A quasi-natural experiment is estab-lished to comprehensively examine the impact of the systemically important banking system on bank liquidity creation.The re-search results indicate that the systemically important banking system significantly improves the liquidity creation of domestic systemically important banks(D-SIBs),and mainly increases the liquidity on the asset side of banks.The liquidity creation promotion effect brought about by the systemically important banking system is heterogeneous,with banks with higher systemi-cally important levels,larger asset scales,and better operational performance receiving a greater promotion effect.Further analysis has found that the systemically important banking system leads to an increase in the loan size on the asset side,de-mand deposits and capital bond size on the liability side of D-SIBs.In addition,the degree to which the systemically important banking system promotes the liquidity creation of D-SIBs decreases as their market competitiveness increases.The research findings of this article have important policy implications.Firstly,regulatory authorities must pay attention to the impacts of systemically important banking system on bank liquidity creation,and handle the relationship between maintain-ing financial stability and serving the real economy of D-SIBs.Secondly,while improving the capital adequacy level of D-SIBs,it is necessary to effectively guide banks to balance current and long-term relationships.Finally,it is necessary to pay attention to the tolerance of different D-SIBs to regulatory requirements and orderly improve the safety level of D-SIBs.
Systemically Important Banking SystemLiquidity CreationBank Competition
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