Does Bank Competition Exacerbate the Build-Up of Regional Financial Risk？

Banks occupy this important position in China's financial system, and the increase of bank competition can affect the stability of the financial system. This paper empirically examines the relationship between bank competition and regional risk using provincial panel data from 2011-2019, taking bank competition as an entry point. It is found that: bank competition leads to the accumulation of regional financial risk, there is spatial autocorrelation and a significant positive spatial effect of bank competition on regional financial risk; there is a full mediation effect of interest rate. In this regard, the central bank should pay moderate attention to the regulation of bank credit when formulating relevant policies, improve the rationality of commercial banks' lending rates, and establish a sound inter-regional financial risk prevention and control mechanism to achieve high-quality financial development.