The Impact Of Foreign Bank Entry On China’s Banking System Stability

It is eleven years since our country joined the WTO. In these years, we havealways taken our words that we would open our bank thoroughly to the world. Also inthe eleven years, the banks out of our country from all over the world have joined inour country’s banks’ joint-stock reforming. They opened their own branches at thesame time.After the financial turmoil of2008, many foreign banks took the action ofmerger and reorganization, partially nationalized, the impact to our local banks willalso change. So, with the continuous entry of foreign banks, what affections did theymake to our banks’ stabilities? And what shall we do, including our banks and ourregulatory authorities. With these ideas, I wrote the paper.About this issue, foreign academia took use of the countries in Latin America,Eastern Europe and the ASEAN to do the study and mainly focused on the analysis ofthe performance of the countries. There are not many studies on the bank stability ofChina. In this paper, the author take use of the studies of the domestic and foreignscholars, analyze the impact of foreign bank entry on China’s banking systemstability.In this paper, the author use qualitative and quantitative ways of analysis. Thequalitative way is to explain why the foreign banks come to our country, how theycome in, and how they affect our banking system. The author choose the data from1999to2011, which is the whole time after China’s accession to the WTO. The paperwill try to show whether the foreign banks affect our stability of the banking system,and what shall we do.