Shou Hui
ABSTRACT
In this paper, I use generalized moment estimation to investigate the impact of banking competition and agglomeration on bank credit risk, based on the unbalanced panel data of China's banks from 2011 to 2020.The results show that there is a long-term and short-term dynamic correlation between bank competition and bank credit risk, there is a long-term significant negative correlation in the whole investigation period, but there is a nonlinear "U" correlation in the short term. Bank agglomeration and asset size also have a significant impact on bank credit risk. Therefore, the formulation of macro prudential regulatory policies should fully consider the competition and agglomeration of banks, strengthen the coordination of regulatory policies, and effectively deal with the accumulated risks of unbalanced development of the banking industry, so as to promote economic and financial stability.
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