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Fintech, macroprudential policies and bank risk: Evidence from China

Yang Zhao, John W. Goodell, Yong Wang, Abedin Abedin

International Review of Financial Analysis, Volume: 87, Start page: 102648

Swansea University Author: Abedin Abedin

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Abstract

We explore the relationship between fintech, macroprudential policies, and commercial bank risk-taking. Based on system generalized method of moment modeling on a panel data of 114 commercial banks in China from 2013 to 2020, results show that there are functional differences in the impact of fintec...

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Published in: International Review of Financial Analysis
ISSN: 1057-5219 1873-8079
Published: Elsevier BV 2023
Online Access: Check full text

URI: https://cronfa.swan.ac.uk/Record/cronfa64220
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Abstract: We explore the relationship between fintech, macroprudential policies, and commercial bank risk-taking. Based on system generalized method of moment modeling on a panel data of 114 commercial banks in China from 2013 to 2020, results show that there are functional differences in the impact of fintech on bank risk-taking. Payment and settlement technology (PST), capital raising technology (CRT) and investment management technology (IMT) are positively correlated with bank risk-taking. In contrast, market facility technology (MFT) negatively correlates with bank risk-taking. We also find that macroprudential policies weaken the promotion effect of CRT on bank risk-taking and strengthen the inhibition effect of MFT on bank risk-taking while having no significant moderating effect on PST and bank risk, IMT and bank risk. Further, the micro characteristics of banks (capital adequacy ratio, asset scale, liquidity level) affects the moderating strength of macroprudential policies. Various robustness tests confirm our conclusions.
Keywords: Fintech, Macroprudential policies, Bank risk-taking
College: Faculty of Humanities and Social Sciences
Start Page: 102648