Corporate Governance,Macroprudential Regulation, and Bank Risk-Taking

Effective corporate governance and sound macroprudential policies are crucial to the stability and sustainable development of the banking sector in China. This paper uses panel data sets from 31 listed Chinese commercial banks between 2007 and 2023 to examine how corporate governance and macroprudential regulation influence bank risk-taking. To achieve this, we constructed a set of microlevel corporate governance indicators. The findings show that corporate governance significantly reduces bank risk-taking, while macroprudential regulation positively moderates this relationship. Furthermore, business diversification and loan concentration are the key mechanisms through which corporate governance mitigates risk-taking. We confirmed the soundness of these findings by using robust econometric techniques, including difference-in-differences, system GMM, and alternative independent variables. This study provides valuable insights for optimizing bank capital structures, enhancing corporate governance, improving personnel management, and clarifying the roles of regulators in refining the macroprudential regulatory framework.