A Study On The Banking Systemic Risk And Bank Supervision

The development of financial globalization and financial derivatives are an unprecedented opportunity for the financial industry,but they are also an inducement for banking systemic risk.Subprime mortgage crisis broke out in the United States in July 2008,which effect and destruction were unprecedented.Analyzing the causation of the subprime mortgage crisis,former U.S.Treasury Secretary John Snow said that the root causes of subprime mortgage crisis were banks in the United States."In the bank's lending,the banks of the United States made a lot of mistakes,and created a lot of the so-called financial derivatives." These financial derivatives took "subprime mortgage crisis" flowed into the capital market and the other parts of the world's capital markets from the banks of the United States.Because of the subprime mortgage crisis,many large U.S.banks failed,triggering systemic risk and crisis of "domino effect" in a national scale of the United States even global banking system, which attracted the world-wide attention.But whether at home or abroad,the study on the formation of banking systemic risk,conduction mechanism and bank supervision and other issues still need further profound research.Banking systemic risk,in this paper,is defined as the risk that is produced by some important failed bank or problem banks to other surviving banks in the banking systems in a country(area,or in the world),which may influence the basic banking functions or make it totally fail.This paper from a theoretical and practical foundation two aspects to analyze the causes of banking systemic risk,and noted that the soft budget constraint was also one of the realistic reasons for arising banking systemic risk.This article analyses the transmission mechanism of banking systemic risk from the perspective of the loan market,pointing out that the existence of a nonlinear mechanism that transmits banking risk in the loan market arises the banking systemic risk.For bank supervision,the paper first analyses daily supervision of banks, including:market access management,capital requirements,asset liquidity requirements,and information disclosure and withdrawal mechanism;and then introduces a safety net mechanism-the deposit insurance system and the system of lender of last resort.By a comparative analysis of banking supervision in major developed countries, combined with our country in the actual situation during the transition period,this paper points out that the status quo and issues of China's banking supervision,such as the imperfect legal system of banking supervision,low capital adequacy,low level of bank risk management and management technology,imperfect information disclosure system of commercial banks,the conflict between mixed operation and separate supervision,etc.finally the paper makes recommendations to improve banking supervision in China drawing on international experience.