The Impact of Capital Structure on Liquidity Risk in Commercial Banks - A Case Study of Listed Banks in China

In China’s bank-dominated financial system, liquidity risk has become a key threat to financial stability. In the wake of the 2008 global financial crisis, Basel III elevated liquidity regulation to the core agenda of the international banking regulatory system. Based on the risk absorption theory and the financial vulnerability theory, and adding the dimensions of equity and debt structure analysis, this paper takes 42 Chinese listed banks from 2020 to 2024 as samples to study the correlation between capital structure and liquidity risk by constructing a multiple regression model. The study shows that in China, an increase in capital adequacy ratio can significantly reduce liquidity risk for listed banks; an increase in the proportion of active debt will exacerbate liquidity risk, but the correlation between equity structure and liquidity risk is not large.; a decline in loan quality is an important inducement of liquidity risk. The research conclusions provide micro-evidence for achieving a balance between risk and return through capital structure adjustments, suggesting that regulatory authorities should strengthen capital constraint mechanisms, and commercial banks should optimize their debt structure and establish a comprehensive credit management system.