An Empirical Research On The Measurement Of Fragility Of Chinese Bank System

According to World Bank statistics, since the 20th century, late 70s to 90s, a total of 93 countries have happened 112 sub-systemic financial crises totally, and another 46 countries have taken place in quasi-crisis. The frequency of banking crises in recent years has resulted in governments and academics attach great importance to the banking system vulnerability and risk of early warning research in the field.Along with economic globalization and liberalization, China and the world economy becomes increasingly dependent. In 2007, the United States happened sub-prime loan crisis, the crisis along the money chain, deteriorating formed in 2008 as an international financial storm. The international financial market has been hit hard, and a number of well-known financial institutions on Wall Street sank in trouble, this crisis has evolved into the most serious financial crisis since the Great Depression in 1929. However, banks in China, including financial institutions, have received a shock as well. The fragility of the banking system is China's financial vulnerability and main content of the concentrated expression, so a stable banking system or not, become a matter of national financial development and economic stability, an important research topic.The research of international banking system is more in-depth, and also more comprehensive. However, domestic research on this issue is not yet a lot and it is due to China is still no systemic banking crisis. Domestic research focused on systems research, quantitative and empirical analysis is not many. In order to have a clearer understanding of China's banking system fragility, resolving and eliminating the risk of the banking system to prevent banking crises, so as to establish security and healthy development of the economy. In the basis of previous studies, this paper uses Logit model of the Fragility of China's banking system to conduct an empirical analysis, trying to find the macroeconomic impact of bank fragility factors, and made some suggestions, based on the empirical results.This essay is divided into six parts. The first part is introduction, first put forward the topics of the background and significance, followed by detailed description of the basic ideas of the paper and logical structure, and pointed out the theoretical tool used in this study and research methods, concluded that the papers were the main innovations and shortcomings.The second part starts from the definition of the fragility of banking system. Then compare it with the banking crisis, bank risk and some other related concepts, and a brief review of the fragility of the banking system at home and abroad Study of the theoretical literature and the latest developments and to make in order to brief comments.The third part is an overview of the fragility of China's banking system. First, the status of China's banking system are described by numbers and charts, using the non-performing loan ratio in China's banking sector, capital adequacy ratio, profitability etc. At the same time, there are serious structural problems, such as the concentration of risk to the state-owned banks, asset and income structure is irrational, and a huge difference between state-owned banks and other commercial banks, and so on. Then theoretical analysis on the fragility of China's banking system, point out that the existence of a system, structure, process of liberalization and some other special reason.The fourth part is the focus of this study, namely, China's banking system fragility empirical analysis. This article will combine qualitative indicators and quantitative indicators. First through the examination of the historical risk events, qualitative indicators for analysis and quantitative indicators CMAX comprehensive evaluation of the fragility of China's banking system and concluded:In the period of 21-year (1988-2008) study,9 year is instable, especially in 1988,1993 and 1998, the banking system and the macro economy has seen signs of instability, there are more serious financial risks. Then, take into account the characteristics of China's banking sector and statistical data obtained from the possibility of the 14 selected indicators, using econometric models of China's 1988-2008 year China's banking system fragility status and factors affecting the empirical analysis. Evidence was found that some macroeconomic indicators and financial variables on the vulnerability of China's banking system was significantly correlated, in which GDP growth, consumption growth, the proportion of GDP, bank credit and stock price-earnings ratio for the four indicators of the impact of the fragility of the banking system effects of the most remarkable. This has fully demonstrated the vulnerability of China's banking system is not the banking industry depends largely on a variety of factors, the vulnerability of the entire banking system by the deep-seated factors.Fifth part is the control of the fragility of the banking system's recommendations. In the current economic situation, the banking business development should be positive change, optimize the structure of assets and liabilities, adjust credit structure; increase the retail business development, thereby enhancing the anti-risk ability of commercial banks to reduce the fragility of the banking system; the same time, we must establish stable and sound macroeconomic environment, market environment and the social credit environment for the healthy development of banks to create the environment; Finally, to establish and improve a comprehensive risk control system and risk early warning system, from the supervision of the banking system stable operation.