Can the Mergers and Restructuring of Small and Medium-Sized Banks Alleviate the Local Debt Risks?Based on Data from 118 City and Rural Commercial Banks
As a financial behavior that implies the intention of local governments,there is little attention paid to whether the mergers and structuring of small and medium-sized banks can alleviate local debt risks.The research uses data from 118 city and rural commercial banks from 2009 to 2021 to find that the mergers and restructuring of small and medium-sized banks can significantly alleviate local debt risks,and it still holds true after considering the cumulative characteristics of debts.Moreover,the mergers and restructuring of rural commercial banks and robust banks can better curb local debt risks,which is also true in areas with high dependence on real estate,a high proportion of large bank assets and the concentration of high-risk banks.The underlying mechanism is that the mergers and restructuring of small and medium-sized banks reduce local debt risks by easing local government intervention and enhancing their ability to serve the real economy.The research has enlightening significance for defusing local debt risks from the bank side and re-understanding the connotation of mergers and restructuring of small and medium-sized banks.
local debt riskssmall and medium-sized banksmergers and restructuring
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