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How FinTech Affects Bank Systemic Risk: Evidence from China

Author

Listed:
  • Qian Chen

    (Beijing Technology and Business University
    Beijing Technology and Business University)

  • Chuang Shen

    (Nanjing University of Finance and Economics)

Abstract

In this paper, we investigate whether and how financial technology (FinTech) affects the systemic risk of Chinese banks. Based on bank-level panel data and the system generalized method of moments (SYS-GMM), we find that FinTech increases both banks’ exposure and their contribution to systemic risk, and these effects only occur in local commercial banks, less profitable banks, and banks in regions with less developed FinTech. We also investigate the source of FinTech’s influence and find that it increases the scale of interbank business and enhances the correlation between banks that increases the possibility of risk contagion.

Suggested Citation

  • Qian Chen & Chuang Shen, 2024. "How FinTech Affects Bank Systemic Risk: Evidence from China," Journal of Financial Services Research, Springer;Western Finance Association, vol. 65(1), pages 77-101, February.
    • Handle: RePEc:kap:jfsres:v:65:y:2024:i:1:d:10.1007_s10693-023-00421-7
    DOI: 10.1007/s10693-023-00421-7
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    References listed on IDEAS

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    Cited by:

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    2. Mies, Michael, 2024. "Empirical research on banks' risk disclosure: Systematic literature review, bibliometric analysis and future research agenda," International Review of Financial Analysis, Elsevier, vol. 95(PA).

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    More about this item

    Keywords

    FinTech; Bank systemic risk; Interbank network; Risk contagion;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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