Study on Regulation Capital Adequacy Ratio and Bank Credit Fluctuation

Along with the implement ot the capital regulation in the world,the ratio of capital adequacy is becomming a important condition towords the bank behavior.Because of the capital supervision,the periodic fluctuation of bank credit will increase,which will lead to economic cycle fluctuation intensify.In macro prudential supervision framework,the Basel protocol improves the bank regulatory capital requirement,and on the other hand,advocates the establishment of countercyclical capital buffer.This article embarks from the regulation mechanism of macro-prudential regulation in the banking industry framework,under the influence of capital adequacy ratio and a capital buffer.Through establishing the bank credit optimal choice behavior model under the constraint of regulatory capital,the analysis show that,the capital buffer size is the essential factor of bank credit sensitivity on economic fluctuations,raising capital adequacy requirements will enhance bank credit procyclical under conditions of economic fluctuations.