Abstract: Foreign experience shows that interest rate liberalization is often accompanied by banking crisis. With the deepening interest rate liberalization in our country, how to effectively control the risk level of banks has become a common concern of theoretical research. Based on 2004-2015 micro data of 130 commercial banks in China, this paper empirically tests the relationship among China′s interest rate liberalization, bank micro characteristics and risk-taking by using the method of dynamic panel estimation of GMM. The results show that interest rate liberalization has a U-shaped relationship with banks′ risk-taking; the risk-taking level of state-owned banks is low, and interest rate liberalization will increase the risk-taking of joint-stock banks;the higher the capital adequacy ratio and the lower the loan-to-deposit ratio, the lower the risk-taking level. But with the deepening of interest rate liberalization, the effect of high capital adequacy ratio and low deposit-to-loan ratio on banks′ risk-taking reduction will be weakened;in the sample of local banks, banks that do not choose to operate across the region have lower risk-taking. However, with the deepening of interest rate liberalization, the cross-regional operation of local banks will weaken the role of increasing banks′ risk-taking. The above research results show that regulators need to be aware of the aggravation of the banking risks caused by interest rate liberalization, and build a more effective regulatory index system based on the different micro characteristics of banks.

Key words: interest rate liberalization, capital adequacy ratio;loan-to-deposit ratio, cross-regional operation, banks′ risk-taking