Proceedings of 7th Global Business and Social Science Research Conference
13 - 14 June, 2013, Radisson Blu Hotel, Beijing, China, ISBN: 978-1-922069-26-9
The Effect of Ownership on the Prudential Behavior of
Banks-The Case of Taiwan
Ming-Chang Chen, Chien-Chi Lee, Hui-Chuan Wang, and
Dun-Yi Chiou
1. Introduction
Following the liberalization of the global economy, the effect of ownership has
essentially changed. Almost every capitalism was involved in this trend; also included
Taiwan. Because of the monitoring force became weaker than before, the private
banks had surfaced more and more quickly. To have higher competitiveness, every
banks need to Increase the operating efficiency.
However, too many banks to overwhelm the financial quality; they had to delicate all
their business in short performance which is like short loan and short deposit. As the
result, the overdue loans and non-performing loan quality had been much worse
since this happened. That’s why most recently literatures are attributed in the private
bank performance. On the contrary, there are few studies focus in the way in which
managerial risk taking. Furthermore, hardly papers use risk-taking behavior
measures as long-term measures instead of short-term performance measures such
as annual returns. And Jia (2009) is the first academic use the method to investigate
the relationship between ownership and prudential behavior of banks in China.
Following Jia (2009) study, we prefer to use Taiwan data and take advantage of this
way to hypothesis that private banks have been more prudential than public banks
after financial policy. Besides, whether the financial reform accurately make the
financial system become more prudential in their risk-taking behavior.
2. Literature review
There’re many papers concerning private bank performance and financial reform
performance, but seldom financial journals used comprehensive views to examine it
since 1994.
_____________________________________________________
Ming-Chang Cheng, National Chung Cheng University, Taiwan. Email: bmamcc@ccu.edu.tw
Chien-Chi Lee, National Chung Cheng University, Taiwan.
Hui-Chuan Wang, Hsing Wu Institute of Technology, Taiwan.
Dun-Yi Chiou, National Chung Cheng University, Taiwan.
Proceedings of 7th Global Business and Social Science Research Conference
13 - 14 June, 2013, Radisson Blu Hotel, Beijing, China, ISBN: 978-1-922069-26-9
Berger et al.(2005) research the relationship between corporate-governance and
bank performance Argentina, and find that banks did lend more prudently after
privatization. Beck et. al (2005) wants to know that even in the unstable environment
as Nigeria; whether privatization is still useful. And the research result concluded that
after privatization, not only banks will lend prudently but also performance loan ratio
gradually decreased. Cebenoyan et al.(1995) examines the relation between equity
ownership composition and insolvency risk for savings and loans (S&Ls).
Find that S&Ls with a high concentration of managerial stock ownership exhibit
greater risk taking behavior than other S&Ls in 1988, a period of regulatory leniency
and forbearance on S&L closures, but lower risk-taking behavior in 1991.Saunders
at.ed. (1990) indicate that stockholder controlled banks exhibit significantly higher
risk taking behavior than managerially controlled banks during the 1979-1982 period
of relative deregulation(prudential behavior). Jia (2009) finds that shareholders and
depositors gives joint-equity banks a better incentive than state-owned banks to
engage in prudent lending. Furthermore, he thinks that the reform of the banking
system has improve the incentive for state-owned banks to behave more prudently in
their lending. Otherwise, other scholars didn’t think the privatization is a good way to
enhance the efficiency and the risk-taking behavior of the banks. Bosnin et al. (1990)
find that in east Europe, the private bank performance have been worse than which
is just processed in Privatization recently. Clarke et al. (2005) find that privatization
can’t always motivate the bank performance. The private bank performance even
worse than the banks which is only invested in government bonds. And many
evidence indicates that after privatization, the cost control efficiency doesn’t have
significant improvement. Haber(2005) wants to find the reason why the failure of the
financial reform in Mexico during 1997 to 2003.The results indicate that after
privatization, the financial behavior will be easier. That is to say, privatization and
prudential behavior have negative relationship.
Ho et al. (2008) the academic in China also thinks that the financial reform by the
government can’t only increase the financial efficiency, but also make other
Proceedings of 7th Global Business and Social Science Research Conference
13 - 14 June, 2013, Radisson Blu Hotel, Beijing, China, ISBN: 978-1-922069-26-9
economic problems.
Most of above literatures focus on private banks and maximizes firm value is a
popular topic in corporate governance. However, it was not until scholars began to
use prudential behavior as main way to investigate bank behavior and ownership. In
addition, there’s no exactly definite about “the prudential behavior". Furthermore, it’s
rarer to talk about the relationship between the ownership and prudential behavior of
bank. This research purpose is discussed how the effect of ownership in the
prudential behavior affects among different financial periods and it makes three main
contributions. First, it’s the first paper to study how the ownership effects prudential
behavior of bank using Taiwan as the background over 10 year periods. Second, this
paper is the rare one to study bank’s ownership and prudence by using risk-taking
behavior measure. Risk-taking behavior measure maybe better indicators of bank
long-term improvement than short-term performance measures(Jia,2009).Third,
according to the results, maybe we can judge whether the financial reform achieve
the objective; that is, after financial reform, private banks and financial holding
company are prudent than public banks.
3. Data and methodology
This paper reports an annual panel data analysis. It compares four different
ownerships of banks from 1994 to 2008 in Taiwan, which includes public period,
private period, privatization period, and financial reform period. Moreover, all banks in
these periods are considered in this analysis. To avoid Manual calculation leading to
the biases by different sources, so all of them were come from TEJ financial system.
In addition, because of some shortages in the each period, so we use an arithmetic
mean which can calculate the figure. We then use these adjustments to replace the
missing sample.
Following the study of Jia (2009), we calculate three ratios of bank portfolio allocation
as proxies for bank prudence: bank excess reserves ratio, loan/asset ratio, and
deposit/loan ratio. If a bank operates more prudently, then it will have a higher excess
Proceedings of 7th Global Business and Social Science Research Conference
13 - 14 June, 2013, Radisson Blu Hotel, Beijing, China, ISBN: 978-1-922069-26-9
reserves ratios and deposit/loan ratios and lower loan/asset ratio. Based on the
annual data, Fig.1 shows the difference in bank excess reserves ratio, loan/asset,
and deposit/loan ratio among the public banks, private banks, privatization of public
banks, and financial holding company. The Fig.1.a shows that the private banks have
higher bank excess reserves ratio than others regularly. And you can find that the
bank excess reserves ratios sharp much higher from 2007 to 2008 which can be
attributed to the financial crisis, when the FED raised require reserves, excess
reserves ratio must go higher too(Table 1). The Fig.1.b shows that before that before
2002, public banks, privatization of public banks have higher Loan/Asset ratio than
private banks. However, after 2002, private banks raise steep than others. During the
financial reform, the quality banks were merged into the holding, therefore the
leavings have weaker construction than before. The Fig.1.c shows that at any time,
private banks are always higher Loan/asset ratio than others, but after 2002, they
tend to be same. As a result, it can indicate that the private banks are prudent than
the public banks which coincides with Jia (2009) conclusion. Nonetheless,
contrary to expectation of the financial reform, we can’t find a significant evidence to
support the positive relationship between financial reform and prudence of the banks.
To test whether there’s difference in the level of prudence among different ownership,
we use the basic regression mode by Jia (2007):
Bank prudence measures = α+β1 * List dummy+β2 * GDP growth
+β3 * Interest rate measures,+β4 *Bank fund source measures(short-term
deposit,long- term deposit)+β5* Bank assets
+ Error term.
The dependent variables are the bank prudence measures, that is bank excess
reserves ratio, loan/asset ratio, and loan/asset ratio.
Proceedings of 7th Global Business and Social Science Research Conference
13 - 14 June, 2013, Radisson Blu Hotel, Beijing, China, ISBN: 978-1-922069-26-9
Fig.1. Annual data on the difference in bank prudence.
(a).
Bank excess reserves ratio
Private
Public
Privatization
Holding
330
315
300
285
270
255
240
225
210
195
180
165
150
135
120
105
90
75
60
45
30
15
0
-15
-30
-45
-60
-75
-90
-105
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Loan/Asset
Private
Public
Privatization
Holding
0.98
0.96
0.94
0.92
0.90
0.88
0.86
0.84
0.82
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Proceedings of 7th Global Business and Social Science Research Conference
13 - 14 June, 2013, Radisson Blu Hotel, Beijing, China, ISBN: 978-1-922069-26-9
Deposit/loan
Private
Public
Privatization
Holding
0.95
0.90
0.85
0.80
0.75
0.70
0.65
0.60
0.55
0.50
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Table.1 (from Central Bank of Republic of China )
Reserves Requirements of Financial Institution
Millions of N.T. dollars
Year or
month
Excess
reserves
Borrowing
at CBC
Total
reservable
deposits
Required
reserves
92(2003)
17,225,781
93(2004)
Actual reserves
Total
Deposit
with DBC
Deposit
in
Interbank
funds
with
Transfer
Accounts
Cash in
vaults
883,264
890,672
689,111
31,630
160,932
7,408
1,912
18,473,625
971,005
983,081
782,833
34,018
166,230
12,076
62
94(2005)
19,715,134
1,036,132
1,041,743
830,279
35,278
176,186
5,611
-
95(2006)
20,755,191
1,093,057
1,098,914
883,280
34,972
180,661
5,857
-
96(2007)
21,462,346
1,141,211
1,162,566
939,307
36,047
187,212
21,355
1,852
97(2008)
22,093,250
1,216,767
1,246,609
1,026,469
36,377
183,746
29,842
81
98(2009)
24,012,925
1,286,244
1,381,597
1,163,729
36,646
181,223
95,353
-
Proceedings of 7th Global Business and Social Science Research Conference
13 - 14 June, 2013, Radisson Blu Hotel, Beijing, China, ISBN: 978-1-922069-26-9
4. Regression results.
We use panel data from 1994 to 2008 with three depend variable to explain the
portfolio characteristics of the prudential of banks which includes private banks,
public banks, privatization of public banks, and financial reform corporation. In the
bank excess reserves ratio regression, GDP growth and bank assets are significant
at the 1% or 5% level. Moreover, there’re significant in almost every ownership of
banks and they have the negative relationship in bank excess reserves ratio
regression. This can be explained that during a macroeconomics growth, banks tend
to hold less reserves and lend more. Entry to the WTO since 2001 seems to have no
significant effect on excess reserves. As for the negative coefficient of banks assets
suggests that smaller banks like private banks tend to hold greater excess reserves
than big banks like public banks. In addition, you can find that the ratio short to long
deposits is significant at the 1% level during 2th private bank periods. It can appear to
explain private banks tend to loan less with more long-term deposits and less
short-term deposits, which indicates that the smaller banks like private ones tend to
be more prudent than big banks like public banks. And this result that is fit my
hypothesis. In the loan/asset ratio regression, GDP growth and bank assets also
seems to have power explanatory power. And we think it has the same reasons in the
bank excess reserves ratio regression. However, it fails to explain from 3th:first
financial reform periods and 4th:second financial reform periods(table.4 and 5). This
may be suggested that the financial holdings corporations have variety of financial
business which includes Insurance, securities investment trust and consulting, as the
results, the assets of holdings raise highly than before. Nevertheless, according to
our main research, we only use the assets of banks, not including others. In the
deposit/loan ratio regression, almost all of the independent variables are not good
Proceedings of 7th Global Business and Social Science Research Conference
13 - 14 June, 2013, Radisson Blu Hotel, Beijing, China, ISBN: 978-1-922069-26-9
explanatory variables. Even if you can find interest spread rates seem to have some
explanatory power in 3th: first financial reform periods (table.4), but we still question
the real of the explanatory power since deposit rates and loan rates are not the main
business for financial holdings.
Table.2
1st:
Public banks periods
Bank excess reserves ratio
Private banks
(from 1994 to 1997)
Public&private banks
Coefficient
t-Statistic
Coefficient
t-Statistic
C
-1080.863
-2.991223***
-977.3374
-4.373936***
Bank list
15.99106
1.016034
15.99287
1.362786
GDP
4486.111
2.138903**
4875.835
3.017254**
Rate spread
-1.291432
-1.322932
-1.455095
-1.752029**
Short deposit
/long deposit
-30.37265
-0.110144
-94.98839
-1.313021
Bank asset
80.30979
2.400106**
64.27273
3.552131***
0.232403
0.246879
Adjusted
0.161330
0.203093
Prob(F-statistic)
3.269889
0.000153
n
60
92
model
Random effects
Random effects
Proceedings of 7th Global Business and Social Science Research Conference
13 - 14 June, 2013, Radisson Blu Hotel, Beijing, China, ISBN: 978-1-922069-26-9
1st:
Public banks periods
Loan/asset
Private banks
(from 1994 to 1997)
Public&private banks
Coefficient
t-Statistic
Coefficient
t-Statistic
C
-0.737878
-3.245410***
0.132154
1.077176
Bank list
0.018344
1.223872
0.010168
1.027505
GDP
1.593515
2.916514***
0.356713
1.002063
Rate spread
2.32E-05
0.115611
-6.63E-05
-0.375867
Short deposit
/long deposit
-0.481369
-2.844582***
0.001772
0.049278
Bank asset
0.186487
7.901887***
0.089124
7.181017***
0.186487
7.901887***
Adjusted
0.548015
0.365323
Prob(F-statistic)
0.506164
0.328423
n
60
92
model
Random effects
Random effects
1st:
Public banks periods
Deposit/loan
Private banks
(from 1994 to 1997)
Public&private banks
Coefficient
t-Statistic
Coefficient
t-Statistic
C
-0.433686
-0.214066
1.234871
1.144660
Bank list
0.071156
0.667232
-0.048063
-0.619783
GDP
-8.473067
-1.276507
-8.420275
-2.077219**
Rate spread
Short deposit
/long deposit
Bank asset
-5.44E-05
-0.018766
-0.000524
-0.248586
-1.351389
-0.820216
0.001663
0.004573
0.245897
1.179447
0.031815
0.297710
0.098949
0.061343
Adjusted
0.015518
0.006770
Prob(F-statistic)
0.328248
0.353790
n
60
92
model
Random effects
Random effects
Proceedings of 7th Global Business and Social Science Research Conference
13 - 14 June, 2013, Radisson Blu Hotel, Beijing, China, ISBN: 978-1-922069-26-9
Table 3
2st:
Private banks Bank excess reserves ratio
periods
Private banks
Public&private banks
Public&private&privatization
banks
(from 1998 to
2001)
Coefficien
t
t-Statistic
Coefficient
t-Statistic
Coefficient
t-Statistic
C
1204.706
7.213905***
884.4716
7.058669***
847.4587
8.015391***
Bank list
-6.882400
-0.562502
-14.85439
-1.243844
-10.83147
-1.137511
GDP
-293.0547
-2.058722**
-295.1763
-2.237594**
-271.9279
-2.363869**
Rate spread
0.229202
0.935299
0.133336
0.565326
0.101065
0.463233
Short deposit
/long deposit
763.8451
6.024228***
484.0197
4.850101***
478.0886
5.255160***
Bank asset
-146.6237
-7.011759***
-104.5881
-6.728824***
-100.1510
-7.600994***
0.307216
0.243408
0.253009
Adjusted
0.284123
0.220056
0.233352
Prob(F-statistic)
0.000000
0.000000
0.000000
n
156
168
196
model
Random effects
Random effects
Random effects
Private banks
Public&private banks
Public&private&privatization
banks
(from 1998 to
2001)
Coefficien
t
t-Statistic
Coefficient
t-Statistic
Coefficient
t-Statistic
C
0.814086
3.094213***
0.766822
3.364062***
0.693397
3.595753***
Bank list
0.004407
0.178581
0.001984
0.074366
0.009839
0.455865
GDP
-0.272325
-4.825023***
-0.235773
-4.528690***
-0.199721
-4.396109***
Rate spread
-7.24E-06
-0.066410
2.57E-06
0.024351
-4.17E-06
-0.042319
Short deposit
/long deposit
-0.535612
-4.210134***
-0.409633
-3.555122***
-0.365327
-3.458783***
Bank asset
0.017318
0.536157
0.022151
0.800470
0.030540
1.306727
2st:
Private banks Loan/asset
periods
0.168649
0.145792
0.124323
Adjusted
0.140938
0.119427
0.101279
Prob(F-statistic)
0.000037
0.000099
0.000116
n
156
168
196
model
Random effects
Random effects
Random effects
Proceedings of 7th Global Business and Social Science Research Conference
13 - 14 June, 2013, Radisson Blu Hotel, Beijing, China, ISBN: 978-1-922069-26-9
2st:
Private banks Deposit/loan
periods
Private banks
Public&private banks
Public&private&privatization
banks
(from 1998 to
2001)
Coefficient
t-Statistic
Coefficient
t-Statistic
Coefficient
C
1.674744
3.469120***
1.340479
3.284809***
1.470365
3.824300***
Bank list
-0.030444
-0.796065
-0.035742
-0.859712
-0.083835
-2.189222**
GDP
-0.013765
-0.080975
0.045539
0.290437
-0.031580
-0.230924
Rate spread
0.000452
1.366236
0.000521
1.631287
0.000557
1.866066*
Short deposit
/long deposit
-0.521195
-1.701447*
-0.245101
-0.900522
-0.251603
-0.942793
Bank asset
-0.095913
-1.602245
-0.057381
-1.145389
-0.072329
-1.533694
0.074707
0.042812
0.070077
Adjusted
0.043864
0.013270
0.045606
Prob(F-statistic)
0.038198
0.209464
0.016177
n
156
168
196
model
Random effects
Random effects
Random effects
t-Statistic
Table.4
3st:
First financial Bank excess reserves ratio
reform periods
Private banks
Public&private banks
Public&private&reform banks
(from 2002 to
2004)
Coefficien
t
t-Statistic
Coefficient
t-Statistic
Coefficient
t-Statistic
C
2261.001
10.50053***
1478.643
9.278339***
1293.392
5.653279***
Bank list
8.823882
0.604954
-23.73795
-1.475672
18.83354
0.712457
GDP
-756.5375
-1.667208
-740.9426
-1.834732*
-728.5729
-2.289177**
Rate spread
Short deposit
/long deposit
Bank asset
0.545564
0.859245
0.495197
0.790545
0.933744
1.580719
55.74310
0.515888
-148.0437
-1.282870
-337.0465
-2.156480**
-257.3969
-9.425350***
-157.3048
-7.962032***
-132.8701
-4.681312**
0.675310
0.553001
0.297120
Adjusted
0.651781
0.524348
0.267082
Prob(F-statistic)
0.000000
0.000000
0.000000
n
75
84
123
model
Random effects
Random effects
Random effects
Proceedings of 7th Global Business and Social Science Research Conference
13 - 14 June, 2013, Radisson Blu Hotel, Beijing, China, ISBN: 978-1-922069-26-9
3st:
First financial Loan/asset
reform periods
Private banks
Public&private banks
Public&private&privatization
banks
(from 2002 to
2004)
Coefficient
t-Statistic
Coefficient
t-Statistic
Coefficient
t-Statistic
C
1.480861
2.067513**
1.322285
2.897993***
1.051451
3.304405***
Bank list
-0.056393
-0.947173
-0.064626
-1.266202
-0.073917
-1.828689**
GDP
-0.176494
-0.397560
-0.173144
-0.445128
-0.146981
-0.529400
Rate spread
-5.85E-05
-0.080021
-0.000103
-0.154487
-0.000279
-0.528152
Short deposit
/long deposit
-0.022751
-0.076965
-0.049765
-0.190999
-0.041795
-0.231402
Bank asset
-0.060252
-0.667376
-0.039955
-0.710726
-0.007558
-0.193022
0.035841
0.034222
0.039787
Adjusted
-0.034025
-0.027687
-0.001247
Prob(F-statistic)
0.765526
0.735738
0.439424
n
75
84
123
model
Random effects
Random effects
Random effects
Private banks
Public&private banks
Public&private&privatization
banks
(from 2002 to
2004)
Coefficient
t-Statistic
Coefficient
t-Statistic
Coefficient
C
2.846818
4.893645***
2.022290
5.141684***
2.006419
4.642054***
Bank list
0.034821
0.709327
-0.008810
-0.200410
-0.114201
-1.901787*
GDP
-0.152038
-0.434763
-0.279234
-0.829273
-0.076971
-0.253609
Rate spread
-0.002597
-4.509664***
-0.002250
-3.895874***
-0.002162`
-3.736387***
Short deposit
/long deposit
0.032337
0.136492
-0.090108
-0.400419
-0.372646
-1.733737*
Bank asset
-0.242586
-3.310114***
-0.136550
-2.817595***
-0.132365
-2.501162**
3st:
First financial Deposit/loan
reform periods
0.354509
0.264921
0.228153
Adjusted
0.307734
0.217800
0.195169
Prob(F-statistic)
0.000010
0.000178
0.000011
n
75
84
123
model
Random effects
Random effects
Random effects
t-Statistic
Proceedings of 7th Global Business and Social Science Research Conference
13 - 14 June, 2013, Radisson Blu Hotel, Beijing, China, ISBN: 978-1-922069-26-9
Table.5
4st:
Second
financial
reform periods
Bank excess reserves ratio
Private banks
Public&private banks
Public&private&reform banks
(from 2005 to
2008)
Coefficient
t-Statistic
Coefficient
t-Statistic
Coefficient
t-Statistic
C
1719.800
4.020202***
1467.993
4.294200***
1998.265
4.372530***
Bank list
53.93204
1.365475
41.39490
1.114907
87.23237
1.532380
GDP
-3334.375
-6.002744***
-3120.391
-5.997616***
-3181.010
-5.957223***
Rate spread
0.694155
0.299959
-0.188697
-0.087472
-2.005317
-1.211620
Short deposit
/long deposit
44.66677
0.157646
62.52945
0.240004
477.7668
2.487965**
Bank asset
-185.2222
-3.492142***
-154.5261
-3.698652***
-222.1813
-4.103442***
0.370224
0.353961
0.224116
Adjusted
0.335236
0.321000
0.198925
Prob(F-statistic)
0.000000
0.000000
0.000000
n
96
104
160
model
Random effects
Random effects
Random effects
4st:
Second
financial
reform periods
Loan/asset
Private banks
Public&private banks
Public&private&privatization
banks
(from 2005 to
2008)
Coefficient
t-Statistic
Coefficient
t-Statistic
Coefficient
t-Statistic
C
1.522833
6.734495***
1.436350
7.793947***
1.193341
7.501133***
Bank list
-0.033001
-1.444015
-0.037011
-1.702501*
-0.042356
-2.011434
GDP
-0.157682
-0.952388
-0.155875
-1.012378
-0.094682
-0.896748**
Rate spread
0.000148
0.198690
0.000113
0.163116
-6.00E-05
-0.171554
Short deposit
/long deposit
0.016634
0.127569
0.003928
0.034051
-0.109804
-2.439778**
Bank asset
-0.065839
-2.369564**
-0.054874
-2.465235***
-0.024797
-1.320737
0.102877
0.098198
0.039787
Adjusted
0.053037
0.052188
-0.001247
Prob(F-statistic)
0.077215
0.067625
0.439424
n
96
104
160
Proceedings of 7th Global Business and Social Science Research Conference
13 - 14 June, 2013, Radisson Blu Hotel, Beijing, China, ISBN: 978-1-922069-26-9
model
Random effects
Random effects
Random effects
4st:
Second
financial
reform periods
Deposit/loan
Private banks
Public&private banks
Public&private&privatization
banks
(from 2005 to
2008)
Coefficient
t-Statistic
Coefficient
t-Statistic
Coefficient
C
1.273851
5.765467***
1.293547
6.832524***
2.034123
5.325845***
Bank list
-0.021903
-0.818957
-0.023947
-0.965987
-0.088745
-1.539986
GDP
-0.219933
-2.140870**
-0.239804
-2.246373**
-0.447099
-2.825091***
Rate spread
-0.000117
-0.246062
-1.38E-05
-0.028217
0.000336
0.628591
Short deposit
/long deposit
-0.155863
-1.533323
-0.104214
-1.114519
-0.074062
-1.035626
Bank asset
-0.046923
-1.748611*
-0.049717
-2.197425**
-0.137411
-3.058853***
0.124422
0.120625
0.146269
Adjusted
0.075778
0.075759
0.118551
Prob(F-statistic)
0.032735
0.025460
0.000167
n
96
104
160
model
Random effects
Random effects
Random effects
t-Statistic
5. Conclusion
This paper focuses on the relationship between bank ownership and bank prudence
in Taiwan. After consider several ways to evaluate the prudential behavior of banks,
we regard three ratios of banks as proxies for bank prudence. According to the
findings, the regression results are coincident with Jia (2009). It indicates that
whether in Taiwan or China , private banks tend to have higher excess reserves,
higher deposit/loan ratios, and lower loan/asset ratios. In other words, private banks
are apparently more prudent than the public banks. However, there isn’t a significant
evidence to support the financial holdings are become more prudent through
financial reform.
Proceedings of 7th Global Business and Social Science Research Conference
13 - 14 June, 2013, Radisson Blu Hotel, Beijing, China, ISBN: 978-1-922069-26-9
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