A Study On The Reduction Of The Systematic Risk Of China's Banks And Its Reasons

China's banks has the dominant position in finance, so the risks of bank are deeply related to the security and stability of China's financial system and national economy. Not only is non-systematic risk of China's banks declining, but also its systematic risk is declining.We focus on the research on changes of system risk. Using SCP paradigm, we compare the different industry conditions before and after state-owned commercial banks reform. State-owned commercial banks have gotten a great improvement. Its average rate of return of capital is 0.88% at 2007, while it is 0.26% ten years ago and the average rate of return of net income is 56.36% at 2007, while it is 3.41% ten years ago. The ratio between capital and costs has a small change these years. The lost rate of loan decreases sharply from nearly 30% ten years ago to 6.17% at 2007. The improvement of state-owned commercial banks is helpful to raise banks'ability of risk resistance.Usingβ-coefficient of Capital Asset Pricing Model, we get that the latest three semi-annualβ-coefficient of 11 representative banks is from 1.87 to 0.997, and then down to 0.54. These show that the systematic risk of China's banks is lower and lower.We consider it as the result of economic growth, disposal of national policy, joint-stock reform of national banks and internal reform of banking system.