The Impact of Implicit Government Support on Bank Risk and Risk-taking

• Main Authors: YAO, HSIN-LUN, 姚炘綸
• Other Authors: HUANG, YU-LI
• Format: Others
• Language: zh-TW
• Published: 2018
• Online Access: http://ndltd.ncl.edu.tw/handle/rrwdug

碩士 === 實踐大學 === 財務金融學系碩士班 === 106 === 　　This paper uses the credit ratings of Taiwanese commercial banks issued by Moody’s and Fitch during 2000-2016 as samples to investigate the effects of implicit government support on bank risk and risk-taking. First, in order to observe the relationship between implicit government support and risk-taking, we use the gap between Moody's bank deposit rating and Moody's based credit rating as a proxy for external assistance (DIF) and Fitch's support rating (SUP) as a proxy variable. If Moody's bank deposit rating is better than that of Moody's based credit rating, it indicates that the extent of external assistance is relatively significant. On the contrary, when Moody's bank deposit rating is worse than that of Moody's based credit rating, it can be inferred that the external assistance cannot be obtained. Based on Fitch's support rating (SUP), rating of "1" means that the support rate is extremely high, ie, the degree of external assistance is large, whereas "5" indicates that banks cannot rely on the support, namely, the degree of external assistance obtained is limited. Secondly, we use Taiwanese commercial banks as the research objects, and then the samples are further divided into two groups, the privatized government banks and the private banks, in order to understand whether or not an privatized government bank has more access to external aids and accordingly runs lower risks. 　　The research results conclude that first, Taiwanese commercial banks, as a whole, have received very high ratings. Secondly, most Taiwanese commercial banks can obtain certain external assistance; the more the positive gap is, the greater degree of external assistance received. Thirdly, due to the fact that the privatized government banks are partially owned by the government, they are considered to have low operational risks and therefore are likely to receive external assistances. Private banks, however, even with the support of parent companies or enterprise groups, have comparativly lower chances to receive external assistances.