Dissertation > Economic > Fiscal, monetary > Finance, banking > China's financial,banking > Finance, banking system

Research on the Macro-prudential Regulation of the Systemic Risk in Chinese Banking Industry under Basel Ⅲ

Author ZhangZuo
Tutor ZhangZuo
School Shanghai International Studies University
Course International Economics
Keywords Systemic Risk Macro-prudential Banking Regulation Basel Accord
CLC F832.1
Type Master's thesis
Year 2012
Downloads 142
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The2007-2009financial crisis has put the issue of systematic risk in the center of theattention of international financial supervision bureaus. People started to rethink if the idea ofmicro-prudential, which is the guiding principle of Basle Accord II, is capable of preventing theoutbursts of financial crisis led by accumulation of systematic risk. To establish a supervisingframework under the idea of macro-prudential to better regulate the banking systematic risks as be ahot spot in the recent research. Banks are of primal importance in the financial industry, bankingsystemic risks can impose great negativity on the whole financial industry as well as the country’seconomy, due to it’s contagious, and amplifying effect. The banking development mode andfinancial market maturity in China are quite different from those in the Europe and America, thusChina’s bank systemic risks are reflected in it’s own unique way. China’s banking system enjoys ahigh conservation rate, which comes with easy capital formulation, but on the other side, it also hasthe problem of high NPL ratio and low capital adequacy ratio. Its capital structure also has room forimprovement. Currently, banking systemic risks are aggregated in a few industries, especially thereal estate industry. Local government loans are another potential banking credit bomb. Under thesecircumstances, it is very important to access the banking systemic risk condition in Chinese bankingindustry, and establish an sound regulation framework on this matter.This essay will start from reviewing the existing theories on the causes, features and assessingmethods of the banking systemic risks, and its regulation measures, followed by the comparisonbetween micro-prudential regulatory idea and the macro-prudential regulatory idea, and an analysison the shortage of previous Basel accord in supervising the banking systemic risks. This essay isaimed at providing a big picture of macro-prudential supervision, with its policy tools, analyze thepractical experiences on European Union and America, in the hope of giving advises to theapplication of macro-prudential supervision in regulating the banking systemic risks in China.

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