Abstract Basel III revision work is incomplete, but China has abolished the supervision index of deposit-loan ratio. This paper measures the liquidity structure of China's commercial banks by using three indicators: net stable capital ratio, core financing ratio and deposit-loan ratio, and examines the impact of liquidity structure on active and passive financing behavior of 112 commercial banks in China from 2007 to 2016. The study finds that passive financing of commercial banks has a greater negative impact on their active financing, and the liquidity structure strengthens this effect. Further exploration shows that this effect is more from the debt side, on the contrary, the asset side plays a weakening role. Factor analysis confirms that increasing the proportion of other interest-bearing liabilities, loans and investment assets can effectively reduce the impact of liquidity structure of commercial banks on their active and passive financing behavior. Finally, this paper puts forward relevant regulatory recommendations.
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