Can the Establishment of Wealth Management Subsidiaries Isolate the Risks of Commercial Banks?
This paper,by using the difference-in-difference model(DID),examines the impact of Wealth Management Subsidiary(WMS)establishment on the risk-isolation of commercial banks based on the 2018-2021 quarter data of 84 banks.The results show that the establishment of WMS significantly reduces the risk-taking level of parent commercial banks,this risk-isolation effect in-creases over time.Besides,heterogeneity analysis reveals that the risk-isolation effect is the weakest in the urban and rural commercial banks,and is transmitted primarily via de-nesting and fund-pool-removing channels.Further analysis by incorporating the parent bank's balance sheet with its WMS's indicates that establishing WMS is helpful for risk-isolation but doesn't reduce the overall risks taken by the banking holding group.These findings have important implications for improving internal risk control and external supervision of commercial banks.
NETL
NSTL
万方数据
维普
