Study On Risk Factors Affecting The Financial Safety Of China

From the Asian financial crisis in 1997 to the current international financial crisis, the issue of financial safety has been attached more importance. Quantizing financial safety, describing national financial safety condition with an aggregative indicator, and then finding the risk factors which mainly affect the financial safety of China through empirical research is meaningful in a practical way.Chapter 1 of this paper is the preface, which provides the background and the significance of this subject and summarizes the research techniques and innovations, and also the structure of this paper. Chapter 2 clarifies the concept of financial safety, analyses strategic significance of the issue of financial safety and reviews the related literature systematically. Chapter 3 analyses the relation between main risk factors and financial safety in theory, summarizes the conductive route of the risk, and introduces the current situation of these factors in China. In Chapter 4, I constructs a financial safety index and analyses the historical change of the financial safety condition of China during the period of 1998-2008 and the reason of the change. Chapter 5 provides the main risk factors which affected the financial safety condition of China through empirical research. Chapter 6 provides the main conclusion of the paper and gives the policy suggestions and points out the problems in this paper.The main conclusions of this paper are as follows:During the period of 1998-2008, the financial safety condition of China is turning better and better in general, in which the financial supervision system reform, the joint-stock reform in state-owned commercial banks and overall opening of Chinese domestic financial market play an important role. And the main factors affected the financial safety during the sample period are the non-performing loan of banks and the change of the exchange rate.