Research On Macro-prudential Supervision Over The Soundness Of The Banking System In China

After the outbreak of the financial crisis in2008, China’s banking system soundness issues ofconcern, the underlying causes of the banking crisis in its own vulnerability, the inherentvulnerability of the banking system seriously affect its stable development of China’s economic andfinancial developmentpose a threat, thereby enhancing the soundness of the banking system isessential macro-prudential supervision as to make up for inadequate supervision of new ideas, thesoundness of the banking system is bound to play a decisive role, macro stress tests is to verify theeffectone of the methods.The article first introduces research status of domestic and international macro-prudentialsupervision and related theoretical analysis of the importance of macro-prudential supervision fromthe systemic risk, shadow banking, micro-prudential supervision of three angles. Second, in thecase of the four major state-behavior factors directly affect bank soundness (capital adequacy ratio,non-performing loan ratio, asset yields, loan-to-deposit ratio, etc.), using factor analysis method isselected to build the index of the stability of the banking system in China. Then, taking into accountthe macroeconomic variables impact on the stability of the banking system in China, this paperfinally selected a GDP growth rate of CPI growth rates and foreign exchange reserves growth ratebuild vector auto-regression model used to analyze the impact of each variable on the stability ofthe banking system.Macro stress testing as an important tool to assess the soundness of the banking system, more andmore attention by the national regulatory authorities. The article refers to the People’s Bank ofstress scenarios set selected these two indicators representative of the non-performing loan rate andGDP, respectively, a drastic change of the two indicators, the soundness of the banking system inChina changes. And on the basis of theoretical analysis and empirical research on how to improvethe effect of China’s macro-prudential supervision and made a number of recommendations toenhance the soundness of the banking system.