Study Of China's Banking Crisis Early Warning Indicator System

Financial industry is the core of modern economy while the stability of financial institution is the core of financial stability. With the rapid development of financial globalization, worldwide banking crises break out continually. Since the 8O's last century, banking crises have taken place in various degrees in both developed countries and developing countries all over the world. Bank is the most important financial institution, especially in developing countries. Since the infectivity of banking crisis and the extension of its influence, banking crisis often damages the economy most so it is of specially great importance to prevent and eliminate the banking crisis. If we can investigate the rule of economical operation through some unusual signs before the crisis, and then set up an alarm system of banking crisis, discovering and recognizing the risks timely to provide proofs to commercial banks and regulation bureaus for taking measures to avoid banking crisis in effect, which can obviously reduce losses instead of taking remedy measures afterwards. Therefore, the countries all over the world have attached great importance to the early warning of the crisis and already set up the early warning system of banking crisis. The work in this respect of our country lags behind and an integral alarm system has not been set up, so it is urgent to change this kind of status in both technical and systemic aspect. Through the analysis of domestic and international banking crisis, discovering the inherent mechanism and realistic factors of banking crisis, drawing lessons from the research, model and index system of the alarm system, this text tries to set up a set of alarm index system of banking crisis suiting the actual conditions of our country to helpfully contribute to the study about China's banking crisis.