THE IMPACT OF THE NEW ASSET MANAGEMENT REGULATION ON BANK STABILITY RISK

The Guiding Opinions on Regulating the Asset Management Business of Financial Institutions (the New Asset Management Regulation) jointly issued by the People’s Bank of China and four other departments in April 2018 effectively cuts off the risk transmission paths of the shadow banking business, but it also poses a challenge to the conduct of business of commercial banks. This paper selects the annual panel data of 42 listed banks from 2013 to 2022, and analyzes the impact of the policy shock of the new regulation on bank stability risk by double difference model (DID). The results show that the introduction of the new regulation on capital management significantly reduces the stability risk of banks; when banks have lower capital adequacy and face more risks, the greater the positive impact of the new regulation on them.