The Fragility Analysis of China’s Banking System
|School||Beijing Technology and Business University|
|Keywords||bank of fragility factor analysis risk measure|
Bank of fragility research has been a hot and difficult point in the study of banking crises.Bank of fragility is a prelude to the outbreak of banking crises,also is the process of moving from quantitative to qualitative change.In this paper,drawing on existing research at home and abroad,based on the use of factor analysis method,this paper construct the Bank of the vulnerability index line during1986-2008, measure the existence of the fragility of the banking system to quantify risk,then identify fragilities of the banking system in China of the main source.By analyzing the changes in the fragility of 1986-2008 years,this paper comes to the conclusion:China’s banking system and the fragility of the major banks is facing liquidity risk and credit risk. Based on the empirical analysis is a case study. In view of our country there is no large-scale bank failures of events in history,only the case of the Hainan Development Bank was failure.Through the case of Hainan Development Bank, further analysis of the fragility of the banking crisis from the outbreak of the process,explore the accumulation from the fragility of the banking crisis causes.Case study reached the following conclusions: First,the financial industry need adapt to their own strength and economic development,can not be blind to the expansion of mergers and acquisitions.Second,separate government from enterprises.commercial banks can go into independent economic entities.Third, strengthen financial regulation.establish and improve the commercial bank’s internal control system.Fourth,the establishment of a deposit insurance system,and strengthen the confidence of depositors.After the completion of empirical analysis and case analysis,this paper at last put forward the countermeasures to the question of fragility banks– the efforts to build early warning systems of Bank of fragility and perfect the current system.