The impact of being listed as a global systemically important bank on the risk-resistance capabilities of China's four major commercial banks

Abstract

This paper studies the impact of the four central commercial banks listed as global systemically important on the resilience and robustness of China's four major commercial banks (Bank of China, Industrial and Commercial Bank of China, Agricultural Bank of China, and China Construction Bank). This paper uses regression analysis and difference-in-difference (DID) model to study banks' capital adequacy ratio, core capital adequacy ratio, and weighted risk asset ratio. The regression linear model results show that the relationship between banks listed as internationally systemically important banks and banks' capital adequacy ratio and core capital adequacy ratio is significantly positive. The robustness test used causality analysis. The difference in- difference model is used to test the parallel trend to verify the causality between the central and the result variable. The results of the parallel trend test in robustness detection show that the central variable and the result variable are not significant before the event occurs, and the relationship after the event is significant. This shows that when China's four central commercial banks are listed as global systemically important banks, their risk resistance and robustness significantly improve. In addition, the results of the study also have reference significance for China's current banking supervision.