Study On The Risk Early-warning Of Chinese Commercial Banks

The risk of commercial banks is the uncertainties that banks will face to in the process of the business activities and the resulting adverse consequences the uncertainties lead to. In order to ensure that commercial banks can withstand the test of time and environment, in order to guarantee with a full range of risk warning and prevention capabilities, commercial banks must be provided protection based on the existing environment of Chinese capital market and investment system, early warning and control of internal risk-based, warm and prevent the invasion external risk and prevent the objective risk of commercial banks to expand the risk effect,.. Commercial banks to build a comprehensive and effective risk warning system,which include the bank’s systematic risk and non-systematic risk,by which the commercial bank’s ability can predict risk and control risk.A complete financial crisis early warning system, including early warning objectives, early warning indicators, early warning methods and early warning results.Bank security early warning systems also include these four parts. Bank risk early warning systems approach is the key to building an early warning system.The main early warning:method of the financial crisis are NSR method, FR method, and GM (1,1) method since the1990s. NSR method can provide the possibility of crisis that will happen by monitoring a set of indicators. The FR method is to directly estimate the conditional probability to the set targets and then estimate the probability of occurrence of financial crisis. GM (1,1) method the mathematical model the Occurrence of various indicators to predict the next stage of the predictive value of various indicators, in order to conduct a risk assessment.According to the data from2000to2010, the analytical results show that the coefficient of each variable is different. The bank’s risk can be divided into system risk and non-system risk, including the subsystem of financial structure, the national economic and financial system and the subsystem of global economic environment, which are arranged in accordance with the weight from largest to smallest order; while the non-system risk involves the bank’s profitability, the quality of the assets, the debt capacity and so on. Therefore, in terms of the systematic safety case for China’s banking industry, financial development and financial structure and management of the financial sector play a crucial role. This shows that in China as a bank to the dominance of the financing system, financial development as well as financial structure plays a key role in bank’s system risk.