Towards financial resilience: an examination of Basel III implementation, efficiency and stability in China’s banking landscape

China fully implemented Basel III in 2013, embedding it into a banking sector marked by diverse ownership structures—state-owned, joint-stock, and foreign banks—and increasing global integration. This thesis explores the impact of Basel III capital regulation on credit risk-taking, cost efficiency, and systemic risk in China's banking industry from 2010 to 2022.<br><br>Three research questions are addressed: (1) How does Basel III capital regulation influence bank credit risk-taking, considering ownership structures?

(2) Does stringent capital regulation affect persistent or transient cost efficiency? (3) What is the relationship between regulatory capital, ownership structures, and systemic risk? Using panel data from 376 Chinese financial institutions (58 listed banks as regression sample), the study employs advanced econometric methods, including a four-component stochastic frontier analysis (SFA) and conditional value-at-risk (CoVaR) models.<br><br>Findings reveal that higher regulatory capital reduces credit risk, with state-owned banks exhibiting greater risk-taking and foreign-owned banks adopting conservative profiles.