Abstract: Based on the data of China's syndicated loans, this paper empirically examines the impact of the bank partnership on the bank financing cost, liquidity creation level and credit supply in the case of liquidity shock. The results show that banks with more partnerships will prefer the liquidity management strategy of external“purchased liquidity”rather than internal“stored liquidity”. In the face of liquidity shocks, banks that have established more partnerships through syndicated loans will face higher financing liquidity risks, which will weaken their liquidity creative ability and reduce the credit supply. The business partnership of banks will encourage banks to relax their internal liquidity management, and eventually bring adverse consequences in the face of liquidity shocks. Therefore, the commercial banks should hold adequate high-quality assets with high liquidity, never relying on the fund of other banks. The regulatory authorities also need to strengthen the supervision of bank liquidity risks, and to avoid the liquidity crisis caused by excessive reliance on the short-term interbank funds of partner banks.

Key words: bank partnership, syndicated loan, liquidity shock, liquidity management