Financial Stability Communication and Banking Systemic Risk
.Preventing systemic financial risks is crucial to maintaining financial and economic stability in China.This paper collects all the financial stability communication corpus on the official website of People's Bank of China between 2010 and 2020,and uses a sentiment dictionary to measure the optimism in financial stability communications.Empirical results indicate that optimistic communications contribute to a decrease in banking systemic risk and the mechanisms are as follows.Optimistic communications guide and coordinate depositors'expectations,preventing bank runs and helping to reduce banks'liquidity risk.Besides,optimistic communications stabilize financial markets,benefiting the solvency of borrowing enterprises and thus helping to reduce banks'credit risk.Optimistic communications also reduce the risk of contagion between banks.However,overly optimistic communications can lead to an increase in systemic risk.This study highlights the importance of strengthening expectation management,which is useful for central banks to prevent systemic risk through expectation management policy tools represented by financial stability communications.
万方数据
维普
