Comprehensive Evaluation On Fragility Of Listed Commercial Banks In China

In the21st century, Along with the tide of economic globalization and financialliberalization, global economy especially the financial industry had a rapiddevelopment. In order to seek new development opportunities, since2004, China’s bigfive state banks, BOC, CCB, ICBC and ABC successively listed on the ShenzhenStock Exchange and the Shanghai Stock Exchange. Since2003, medium-sizedjoint-stock Banks, such as SPDB and CIB were going to list on. The first chapterdefines the connotation of commercial banks fragility, and then analyzes the generalperformances and influencing factors of commercial banks’ fragility. Then this essayintroduces the relevant theories of fragility of commercial banks.The second chapter analyzes the reasons lead to fragility of commercial banks inChina. From micro perspective, the formation of commercial banks fragility is due toindustry characteristics of commercial banks, unreasonable credit structure, defects ofproperty right and excessive financial innovation. From macro perspective, thereasons include macroeconomic development, financial liberalization and bankingcompetition. From special perspective, the reasons include enterprise’s soft budgetdevelopment mode, state controlled financial system and special financial ecologicalenvironment in China.The third chapter builds a fragility index is built by using Dynamic Factor Analysismethod to analyze the fragility of bank system in China from1996to2011from amacro perspective. We can conclude that the fragility of listed commercial bankingsystem present a downward trend year by year. The factors include banking systemrisk, monetary and credit factors, etc.The forth chapter analyzes the fragility of10listed commercial banks from2009to2011through Entropy Method, Grey Correlation Method and Principal componentanalysis from a micro perspective. We can conclude that the fragility of state-ownedcommercial banks is higher that small and medium-sized joint-stock commercialbanks. The micro reasons include non-performing loans, lower profitability andliquidity.The fifth chapter gives the suggestions on solving problems of fragility of listedcommercial banks in China from macro, meso and micro level.The innovation of this essay embodied in macro and micro comprehensive evaluation of commercial banks’ fragility. Firstly, there is rare essay aimed at fragilityof listed commercial banks in China. Secondly, domestic researches are mainly focuson causes and measures of the fragility, and construction of fragility warning system.Essays focus on macro and micro fragility is rare. Therefore, comprehensive fragilityevaluation of commercial banks in China is innovative.