The Research On Risk Prevention And Supervision Of Systemically Important Banks In China

An important change of the new generation of international financial regulation is to incorporate systemic risk regulationinto the new regulation framework and to establish a global macro-prudential supervision system,especially strengthening the supervision of systemically important financial institutions, and improving regulatory strength and effectiveness, and reducing the "large and does not fall" moral hazardand a huge of risk infectious and influence on the global financial industry which systemically importance financial institutions led to; Meanwhile, Chinese financial industry suffers bottlenecks of structural change in the development road of getting bigger and stronger; and separate operation mode for years hinders the improvement of operational efficiency and innovation in service mode of financial institutions;but mixed operation will bring more risks to current imperfect financial system. Financial holding companies which are effective transition tool to set up a subsidiary involved in securities, insurance, trust and other formats that outside the traditional commercial banking business, which inlarges the size of the financial assets and increases the complexity of the business.Once the risk break out, it is possible to have a huge impact on the entire financial system. In this background of domestic financial development, the research on how to regulate Chinese systemically bank has very important practical significance.The outbreak of the financial crisis exposed the lack of supervision of systemically important financial institutions and prompted regulators to pay more attention to preventing systemic risk under the new regulatory framework. Evey countries are concerning:how to make global financial regulatory perfect, how to change domestic financial regulatory framework. Based on this simple problem, this paper expands research on the supervisory of systemically important bank. Chinese large commercial banks in the banking financial institutions accounted for about nearly50%, while banks are the main force of financial industry.Although the development of bank has a fast speed, but endogenous vulnerability remains. So the sound operation of large commercial banks relates to the stability of the entire financial industry. Currently, the international governing body introduced a lot of regulatory policies to complement and strengthen the regulatory regime for systemically important financial institutions, and our regulatory authorities are exploring regulatory strategy which is suitable for China when compling with global regulatory institutional arrangement.This paper focus on changes in the regulatory system for global systemically important financial institutions in recent years, as well as Chinese financial regulatory policy-oriented based on the relative theory. Through the reaserch of identification of systemically important banks and regulatory effectiveness and other issues,this paper establish a framework for the supervision of systemically important banks from three aspects:before regulation、during regulation and after regulation.The paper is divided into six parts, as follows:The first chapter is the Introduction:The introduction involves background, basic theory and literature review research、research ideas and structure of the paper, as well as the paper’s research methods and innovations.The second chapter is Financial crisis promotes financial regulatory reform framework:This chapter is intended to reflect the lackness of supervision during the time when financial crisis spreads and the contents of the global regulatory framework for change, aimming topay more attention to the systemic risk and supervision of systemically important financial institutions.Aslo this paper review the the impact of Chinese financial industry caused by the recent crisis, and the direction of financial regulatory reform after the financial crisis.The third chapter is Assessment of Chinese systemically important banks:the assessment of systemically important banks is prerequisite for effective supervision. This chapter is intended to establish evaluation methods in line with the status of Chinese banking industry. Based on the assessment methods which summarized up,this chapter adopts market analysis (CoVaR) and Index method to build two models to assess the systemically importance of banking system,and finally indicates Chinese systemically important banks which are divided into A class systemically important banks (A-SIBS) and B class systemically important banks (B-SIBS) by comparing two methods.The fourth chapter is Development status of systemically important banks in China and the risks which SIBS are facing:based on the assessment results of Chapter Ⅲ, this chapter analyzes the status and development of Bank of China and Industrial and compares the status and development of A-SIBS and B-SIBS from two dimensions at first.Sencondly, this chapter summarizes the main risks which domestic systemically important banks aref acing currently. Especially, this chapter underlines the significance of management of information technology risk faced by the domestic systemically important banks,Which aims to supplement the framework of risk management of commercial banks.The fifth chapter is Effectiveness of supervision on Chinese systemically important banks:This chapter is intended to analyze the effect of supervision of systemically important banks in China. This chapter establishes the relationship of risks and benefits by function, and simulatsthe effective areas which is represented by capital adequacy ratio and liquidity ratio through Panel Data model, and analyzes effective supervision issues of Chinese systemically of important bank according to the current regulatory framework from capital and liquidity.The sixth chapter is How to set up a framework about supervision system of Chinese systemically important bank.This chapter presents policy recommendations about risk prevention and supervision of Chinese systemically important bank from three dimensions:before regulation、during regulation and after regulation. At last, this chapter shows the conclusion of this paper.The whole paper carrys out by using a variety of methods. Based on the theory research of supervision of systemically important banks,the paper adoptsmarket analysis (CoVaR) and Index method to assess the system importance of commercial bank; and uses system cluster method to identify Chinesessy stemically important banks;and applys Excel logic function to measure information technology risk of systemically important banks;and uses Panel Data model to analyse the effectiveness of these banks.Through these various qualitative and quantitative methods,the paper carrys out a series reaserch about assessments dentification、status、risks and effectiveness analysis of systemically important banks.At last the paper brings forward to setting up a regulatory system from three levels of Chinese systemically important banks.A full range of research aims to provide a method of supervision of systemically important banks for regulatory authorities and supply the lackness of supervision to systemically important banks.