Proceedings of the International Conference on Logistics, Engineering, Management and Computer Science

An Empirical Study on the Effect of the Differentiated Deposit Reserve Policy---Based on the comparative analysis of large and small commercial banks’ liquidity

Authors
Dawen Yan, Yaxing Hu, Zhe Yi, Yue Pan
Corresponding Author
Dawen Yan
Available Online July 2015.
DOI
https://doi.org/10.2991/lemcs-15.2015.160How to use a DOI?
Keywords
Differentiation of deposit reserve ratio; Policy analysis; Commercial bank; Liquidity level; Difference in differences model
Abstract
To evaluate the effect of the differentiated deposit reserve policy, based on the Difference in Differences model, this paper empirically analyzes the difference of changes in current ratio between large and small banks due to the raise of the deposit reserve ratio. The main conclusions drawn are as follows: the deposit reserve policy has a significant impact on the liquidity levels of commercial banks in China. Since the differentiated policy implementation, small-scale banks exceed large-scale banks in the increment of current ratio by 2% with only policy factor considered, which means small banks are more positively affected by the new policy. Nevertheless, with other factors added, the liquidity increment of the large-scale banks goes beyond by 0.14% in comparison with small banks. Combined with the fact that the liquidity of small banks is lower than the large ones, it illustrates that the adjustment of the current deposit reserve policy has not made up for the liquidity gaps between large and small banks and the liquidity condition that small banks will confront would be quite severe.
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Proceedings
International Conference on Logistics Engineering, Management and Computer Science (LEMCS 2015)
Part of series
Advances in Intelligent Systems Research
Publication Date
July 2015
ISBN
978-94-6252-102-5
ISSN
1951-6851
DOI
https://doi.org/10.2991/lemcs-15.2015.160How to use a DOI?
Open Access
This is an open access article distributed under the CC BY-NC license.

Cite this article

TY  - CONF
AU  - Dawen Yan
AU  - Yaxing Hu
AU  - Zhe Yi
AU  - Yue Pan
PY  - 2015/07
DA  - 2015/07
TI  - An Empirical Study on the Effect of the Differentiated Deposit Reserve Policy---Based on the comparative analysis of large and small commercial banks’ liquidity
BT  - International Conference on Logistics Engineering, Management and Computer Science (LEMCS 2015)
PB  - Atlantis Press
SP  - 812
EP  - 817
SN  - 1951-6851
UR  - https://doi.org/10.2991/lemcs-15.2015.160
DO  - https://doi.org/10.2991/lemcs-15.2015.160
ID  - Yan2015/07
ER  -