China’s City Commercial Banking Fragility Research

The healthy development of the financial system plays an important role in national economic development, while the banking system is the most important part of the financial system, steady and healthy development of banking system has a crucial role in promoting the steady growth of national economy. U.S. Subprime Crisis led to more than90bank failures in2007, followed by Greece’s sovereign credit rating to reduce leading to European Debt Crisis that George Soros thought is indeed the banking crisis, let us see that the banking system is so fragile. to The banking system fragility is a prelude to the banking crisis eruptions, and the process is a change from quantitative to qualitative. At present, China’s financial system reform is advancing steadily, banking system reform is deepening, and China’s banking industry gradually formed a pattern of "four tier". City Commercial Banks in the "third tier", on the basis of1300urban credit cooperatives and so far gone through ups and downs of30-year the course, have had total assets from30billion in1986to7.85trillion RMB, besides147city commercial banks in China’s banking industry have become "the backbone", so study the vulnerability is great significance.Based on above ideas, this paper takes actual performance of city commercial banks fragility and influencing factors and fragility measure as studying contents analyze, divided into six chapters and the specific arrangements as follows:In the first chapter, the background, significance, research ideas, the structure arrangement of this thesis are introduced. The research variables and research methods about City Commercial Banks fragility are summarized, after summarizing the existing research at home and abroad. Chapter two introduced definition to banking fragility&banking risk&banking stability&banking crisis and relationships among the four, and defined the City Commercial Banks, focused on domestic and foreign banking fragility indicators selection, and summed up the banking fragility indicators. Chapter three based on above definition and ideas did a basic analysis to City Commercial Banking fragility state from four aspects of Bad Loan Ratio&Capital Adequacy Ratio&Profitability&Liquidity risk, the further study of City Commercial Banking fragility to stabilize our banking system and financial system is essential. Chapter four is the most important chapter, according to China’s commercial banking fragility theory and city commercial status, analyzing affect China’s City Commercial Banking fragility factors from both micro and macro perspective. Chapter five is also an important chapter. According to above analysis, the city commercial banking fragility is subject to the double impact of macroeconomic factors and micro factors. Measure state-owned commercial banking fragility model draws lessens on some nations of abnormal conditions of the four indicators including Bad Loan Ratio, loan growth ratio, inflation rate, capital adequacy ratio before financial-crisis and in financial-crisis, and select the four indicators as the core of measure state-owned commercial banking fragility. Chapter six concluded four effective recommendations in accordance with the analysis of above five chapters: first, improving the corporate governance structure of city commercial; second, with their own regional competitive advantage, enhancing innovation capability; third, proper handle relations with local governments; fourth, creating a good environment for the regional economic development.