Research On Risks Of Listed Commercial Banks In China Based On CCA Method

In the 30 years since reform and opening up, China's economy has grown rapidly, and financial ecological environment is also undergoing great changes. Following the pulse of the times, China's commercial banks have experienced decades of rapid and magnificent development. Commercial banks through financial and business ties infiltrate all areas of social and economic activities, thus becoming the ultimate risk-bearer of all the economic and social risks. Stability of the banking system has been extremely important for the national financial security and social livelihood. At present, with the deepening of China's financial system reform, commercial banks gradually accelerate the pace of reform and listing, listed commercial banks have become the core of commercial banking system. After the restructuring and listing, the comprehensive strength and core competitiveness of China's listed commercial banks have made great progress. Meanwhile, the ever-changing international economic and financial situation, as well as the domestic economic and financial development in the various contradictions and conflicts and the increasingly fierce industry competition have brought new challenges to the listed commercial banks, and have obviously affected the stability of their business. Particularly since 2007, the global economic and financial crisis triggered by the U.S. subprime mortgage crisis has made international banking industry suffer heavy losses, and once again sounded the alarm to the world banking system to prevent the risk. In the current financial situation, in-depth research on China listed commercial banks on the true risk situation, causes, factors, early warning measures and response strategies, will help China listed banks to make risk prevention and enhance their ability to resist risks, thus Minimize the adverse effects of financial risks to social and economic life.Currently, commercial banks and foreign scholars have yielded fruitful results for the study of risks of listed commercial banks in China, providing many useful guides and references. But both in theory and research or the international banking practice, the study of risks of commercial banks tends to be concentrated at a certain area, such as credit risk or market risk, operational risk research. However, the comprehensive and Comprehensive risk assessment study of commercial banks is still relatively scarce and fragmented. Meanwhile, the complex structure of specific risk assessment and early warning in existing risk assessment system are both time-consuming and difficult.Based on the results of previous studies, as well as the option pricing theory and CCA methods, the 14 commercial banks listed by the end of 2007 have been researched with specific data-depth analysis. CCA method is applied to comprehensively assess the risks of listed commercial banks in China. The comparative analysis, risk factors correlation analysis and the construction of risk warning indicators system are also based on CCA method.The main contents are as follows:Chapter I reviews the relevant theories on commercial banks risks research. Commercial banks systemic risk and individual bank failure Constitute the main theory of risk formation. Many modern financial theories which focus on risk assessment are stated and evaluated in this chapter. The overall risk assessment has been proposed as a new trend in research about financial risk management.At last, advantages of CCA method are described, it is more dynamic, more comprehensive on reflecting the risk profile and its trend of listed commercial banks, and it gives a new research method for quantitative analysis on the risks of listed commercial banks.Chapter II briefly discusses the practice of risk assessment in commercial banks. It consists of 4 aspects. The first is the traditional practice of commercial banks, mainly credit risk assessment, commonly based on qualitative analysis; the second is the modern practice of risk assessment of commercial banks, based on new models and new methods developed by western financial agencies mainly since the 90s with a large number of principles of mathematical statistics and quantitative analysis; Thirdly, the new "Basel Agreement" which focuses on the credit risk, market risk, operational risk assessment is summarized, as well as the relevant provisions and the practice of commercial banks in various countries; At last, with a summary and review about all of the above, a question has been pointed out that it is necessary to explore reasonable and simple methods to integratedly assess the overall risk of listed commercial banks.Chapterâ…¢makes an assay of risk situation and potential causes of listed commercial banks, mainly from the points of listed commercial bank's capital, asset quality, profitability, liquidity and other aspects of their risk status, combined with China's specific national conditions.Chapterâ…£makes an empirical analysis about Chinese commercial banks risks based on the CCA method.14 commercial banks listed in A-share market are selected as the research objects. The author creates a risk assessment model based on CCA method for listed commercial banks, and gives an empirical analysis on the comprehensive risk profile of these 14 commercial banks. In addition, the 14 listed commercial banks are sorted into three categories:large state-owned joint-stock banks, the national joint-stock banks and city commercial banks, and are further empirical analyzed for groups and individuals. The analysis resulting in considerable conclusions about the comprehensive and structural risk status as well as variation tendency of China listed commercial banks.Based on the CCA method correlation analysis of risk factors, combined with the experience of the early risk warning from domestic and foreign commercial banks, and fully considering the risk management practice in China commercial banks, Chapterâ…¤has explored to create a commercial bank risk early warning Indicator System, in application of qualitative and quantitative methods. The results of correlation analysis not only reveal the main risks factors to a certain extent, but also provide an important reference for creating risk warning indicator system.Chapterâ…¥gives the conclusions and policy recommendations. The main conclusions of this paper are reviewed and summarized. Combined with the current domestic and international situation, as well as the main risks causes, some relevant policy recommendations have been proposed to improve not only the survival and development environment of banking industry but also their risk-defense strategies.This article aims to provide a new approach to study the risks issues of listed commercial banks. CCA method is introduced to not only comprehensive risks assessment of listed commercial banks but also related research areas, and it has been proved scientific, valid and easy to operate through the empirical research.