XIONG Qiyue, ZENG Gang：Capital Buffer and Banks' Asset Allocation Decisions——Evidence from Multi-national Banking Industries

Abstract：With the worldwide implementation of “Basel Capital Accord Ⅲ”, characteristics of commercial banks' behavior changes in new supervision environment and relative influences on changes of banks' asset allocation decisions have drawn attention from theoretical and practical cycles. Based on data of 350 commercial banks from 1998 to 2012, this paper examines the relationship between capital buffer and banks' asset allocation decisions. The results show that:(1) capital buffer is negatively related to banks' loan behaviors;(2) for banks which own higher capital amount and quality, their loan injection behaviors are more sensitive to changes of capital buffer. Our research shows that the implementation of “Basel Capital Accord Ⅲ” weakens banks' credit ability and makes banks allocate more of their assets in security fields. The regulatory authority should adopt efficient measures to relief the spillover effects on real economy.

Key words： Capital Buffer    System GMM    Credit Behavior    Security Investment

source:Finance & Trade Economics ,No.8,2015