Mergers and Reorganizations of Small and Medium-sized Banks and Local Debt Risk
The merger and reorganization of small and medium-sized banks is not only a financial act,but also contains the will of the local government,and it is worth paying attention to whether it is conducive to alleviating the risk of local debt.This paper matches micro data of 566 small and medium-sized banks with provincial macro debt data from 2009 to 2021,and using systematic GMM estimation methodology,the study shows that small and medium-sized bank mergers and reorganizations mitigate local debt risk,but the cumulative number of mergers and reorganiza-tions is in a U-shaped relationship with local debt risk.Small and medium-sized bank mergers and restructurings have a more pronounced mitigating effect on debt risk in regions with a higher share of large regional banks,slower credit ex-pansion,clustering of risky banks,lower real estate dependence and higher financial regulatory inputs.The mecha-nism lies in the fact that mergers and reorganizations reduce the risk of the regional banking sector and lessen the degree of local government control over banks,thus mitigating local debt risk.This paper is instructive in understanding the role of small and medium-sized bank mergers and reorganizations in promoting local fiscal governance.
small and medium-sized banksmergers and acquisitionslocal debt risksystem GMM
NETL
NSTL
万方数据
维普
