TITLE:
Business Cycle, Banking Market Structure and Capital Buffer
AUTHORS:
Huiming Xu
KEYWORDS:
Business Cycle, Banking Market Structure, Capital Buffer, Countercyclicality
JOURNAL NAME:
Modern Economy,
Vol.7 No.4,
April
20,
2016
ABSTRACT: Based on the panel data of 40 Chinese commercial banks from 2004 to 2014,
this paper tests empirically the relationship among business cycle, banking
market structure and capital buffer using the method of GMM. The results show
that in China: capital buffers fluctuate over the business cycles
countercyclicality, and market concentration shows a negative relationship with
the capital buffers. The decrease of market concentration enforces the
countercyclical behavior of capital buffers.