Study On Financial Fragility Theory

Fragility is easily damaged or broken, delicate, not strong and healthy, weak. Financial fragility is a state that financial industry is easily damaged or broken because of financial industry having high indebtedness, specially, impacted by careless regulation, morality hazard, external factors, it induces financial crisis or indebtedness crisis or enterprise bankruptcy or high inflation or deflation or unemployment.Nonperforining loans is the main cause of crises of bank and financial industry. High nonperforining loans have important influence on bank and a country. 133 countries have suffered from financial problems or financial crises from 181 member countries in IMF from 1980, accounting for 74%. 72 countries have suffered from financial problems because of nonperforining loans from 133 countries, accounting for 67%. 31 countries have suffered from financial crises, 24 financial crises have been produced because of nonperforining loans from 41, accounting for 59%. The relation between bank fragility degree and bank nonperforming loans is that bank fragility degree=(bank nonperforining loans- capital-reserves)/ assets.High nonperforming loans influence functions of bank and whole economy. Because many theoretical problems haven' t been solved by literatures about nonperforming loans, study is meaning on microcosmic mechanism and dynamic path of bank nonperforming loans originating.The paper does some creative research and answer in the following fields stemming from the short of literatures.The first creative research field is as follows.Literatures don' t analyze deeply the supervisory mechanism and dynamic path of bank nonperforming loans originating, that is literatures don' t analyze deeply the behavior of the central bank branch and state-owned commercial bank manager and enterprise manager.We will proves it isn' t always effective that financial monitor attempt to decrease the probability of the nonperforming loan by penalty when we suppose the loan which state-owned commercial bank will loan must be nonperforming loan ( It means that state-owned commercial banks certainly don' t loan ) and we don' t takeinto account, market risk and budget, soft restriction.The second creative research field is as follows.The paper analyzes deeply the meaning of "supervision" , "supervision" should include analyzing behavior parameters of managers.The third creative research field is as follows.The paper analyzes deeply the influence on the marginal values of probability of enterprise manager weaseling from indebtedness for behavior parameters of commercial bank manager and enterprise manager.The fourth creative research field is as follows.The paper analyzes deeply the influence on the marginal values of probability of commercial bank manager supervising for behavior parameters of commercial bank manager and enterprise manager.The fifth creative research field is as follows.The paper differentiates the different influences on bank nonperforming loans originating under cooperation and noncooperation between commercial bank manager and enterprise manager.For example, is nonperforming loans originating easier when commercial bank manager and enterprise manager cooperate than they don' t cooperate? The paper deduces a proposition that it isn' t always easier.The sixth creative research field is as follows.Bank nonperforming loan is "a financial pollutions", it is put forward at, first, it is harmful to social welfare. The paper builds up a utility function (loss function) including Loan balance (control variable) and nonperforming loans (state variable).The seventh creative research field is as follows .The paper analyzes deeply the influence of bank nonperforming loans on the social welfare. The paper solves the saddle point, values and alterable tracks of bank nonperforming loans from optimal control theory.The eighth creative research field is as follows .Shadow price (Hamiltonian multiplier) can be got by multiplying nonperforming loans' s marginal ne...