Early Warning Indicators System Of Commercial Banks On The Condition Of Economy Opening Up

This paper makes an empirical inquiry into the impact of China economy opening up on the early warning indicator system of Chinese commercial banks.By assuming that the international market prices of money and strategic raw materials are,among many others,sources of Chinese commercial banks,this paper proposes that there should be closed correlation between these lagged prices fluctuations and the assets & profitability of commercial banks,and that the prices fluctuations would be good indicators of commercial banks' risks,thus should be introduced into the current early warning indicators system of Chinese commercial banks.In order to the propose above. principle analysis is employed in this paper for reducing the dimensions of the prices data.Furthermore,regression between the prices and the assets of Chinese commercial banks is made to verify the correlations as in the proposition.The following is a brief introduction of each chapter.Chapter 1 briefs the background of this paper's research.A literature review is given as well as the contribution of this paper.In chapter 2 we first posit that the essence of commercial banking management is relative to risk and risk management.There are many kinds of risks emerging in commercial banking.In the last section,we review the literature concerning the risk quantification in commercial banking with comments in both theory and practice perspective.Chapter 3 is dedicated to the impact of economy opening up to the risk management of China's commercial banks.First of all,the competition environment of China's commercial banks have been going through a dramatic change due to China's economy opening up.This change entails a change in the strategy planning of commercial banking.Second,corresponding to the strategy changing,the commercial banks' business scope and the penetration to other economic sectors also have been changing,which would definitely introduce brand new factors that affect the risk management of commercial banks.This chapter tries to identify some of these factors and the mechanics of their impact on risk management.Based on the findings of chapter 3,we in chapter 4 exploit the commands of the new factors to the improvement of risk early warning indicators system of commercial banking.Because these factors are novel to the existing early warning system,it is necessary to make some adaptation.Chapter 5 explores the empirical characteristics of the new factors due to economy opening up in a statistical approach.We compare our findings with other research results in literature to identify the difference.We further search for the empirical significance of these new factors.Chapter 6 is the conclusion.Based on the result of this paper,we make some suggestions to the commercial banking policy making.Finally,we point the short-coming of this paper as well as the reason why we do not make up.