Research On Banking Stability Based On Financial Opening

Banking stability is the core and key of financial stability, especially in today's financial globalization and information globalization background. The Banks have to face the international and domestic financial situation which is constantly changing and full of high risk. Also they have to face the pressure of information asymmetry and information explosion. It is impossible to for them to escape from the reality that financial crisis and the banking crisis occur so frequently. So there are huge implications to do the research of banking stability.This paper studys banking stability as the main line of logic based on the background of financial liberalization. This paper gives new meaning to banking stabilitycombinating of information technology and financial openness characteristics. It means thatbanking stability should focus on understanding the dynamic nature of risk, efficiency, and information asymmetry and behavioral decision of market participants. The paper analyzes the process of opening the banking sector risk events occur, summed up China's banking system is unstable and the main manifestations concluding high non-performing assets, bank runs and not to pay when due. China's banking system has not a systemic banking crisis, because capital market has not fully open, capital account is not fully open and the implicit support of national credit conditions, but with the further development of the in-depth process of opening up, there remains a risk of crisis.In the complicated international and domestic financial environment, there are many factors affecting banking stability.This paper analysis of the impact of bank stabilization mechanism and influence factorsfrom from three angles which is the banking system itself, exogenous factor and information factors, analyzes the mechanism of factors affecting on banking stability.Then, this paper researches information diffusion for bank contagion effectsfrom the perspective of information, analyzes information diffusion for the banking contagion effectfrom the analysis of the spatial and temporal dimensions, and summarizes the banking crisis and space-borne information diffusion characteristics. Furthermore, it analyzes herd behavior of participants during the banking crisis in incomplete information and asymmetric information causes market, and builds a stable banking information spacebased on Boisot information space theory. In the empirical analysis, this paper constructed bank stability evaluation index system from three aspects above. Then calculated China's banking stability index in using the1997-2012data and factor analysis, Granger causality analysis, entropy method mathematical methods, analyzed the relationship between inherent stability of banks and external open, and at last estimated the overall stability of Chinese banks. It is that the overall stability of banks showed an increase in volatility trends.At last, the paper gave the guarantee mechanism of banking stability from four angles which are strengthening basic banking inherently stable,strengthening the prevention and control of exogenous risk,strengthening the banking information disclosure,establishing a stable operating environment sound banking.This article has the following innovations:(1) Innovation of research perspective:The environment of banking survival and development is open and constantly changing. This paper wants to researching the banking stability issues in the dynamic development of the background on financial opening. And this paper incorporates new factors arising from changes in the background. So it has a unique perspective.(2) Innovation of research:Proposing new connotation stable banking which is under the financial opening; The key factors affecting the stability of the banking system analysis mechanism are corporate governance, financial mixed, the new information into account factors; From the information point of view, this paper studys the diffusion of information, market participants'cognitive impact on bank stability, and establishes a banking stability information space based on the Boisot's information space theory;Select a range of indicators that may affect banking stability, to build a more comprehensive evaluation model of banking stability. At last it calculated the degree of China's banking stability.(3) Innovation of research methods:Integrated use of systems engineering entropy theory, statistical methods of factor analysis, Granger causality analysis, especially the use of entropy method to the study of banking stability problems in the past, using an objective method of assignment determine the weight of each factor makes the results more accurate rates.