The Research On The Index System Of China’s Financial Instability

In the background of the financial globalization,our financialliberalization process is speeding up，the connection of our financialmarket development and the world financial market is closer and closer,and with the development of economy,the financial instability sector isincreasing.From the histroy of international financial sectordevelopment,it is a normal phenomenon what are some instability factorsagainsted a country or an economic community.In theory,many world famous experts and scholars on the financialinstability are researching mostly at the analysis of the causes andconsequences of the financial instability,but few on application on theindex system of financial instability of our country,Therefore, studyingthe index system of financial instability of our country has theinstructive meaning and considerable value of the richness of the theoryof financial instability,also it plays the reference role on the China’seconomic decision-makers.It is to construct the index system of financial instability on thebasis of the existed research home and abroad which is mainly selectedquarterly data from2004to2011in various indicators,by using Copulatechnology, the time difference sequence law and Entropy Method of theindex system correlation of each indicator, climate index, as well asthe right to reassignment empirical studies, estimated selectedindicators threshold improved method of traditional Hill by extreme valuetheory focusing on the introduction of the change point theory, whichcalculates a threshold value for each indicator by the quantitative method, and based on this divided indicators financial warning boundaries. It canbe drawn through the analysis of the empirical results of appropriateresearch methods to index system related aspects of the study, which isthe key to this study.On the basis of the above empirical results,it can be concluded to theindex system of financial instability of our country by the combining withthe financial instability in China from this article. Firstly, all of theindicators in the index system of financial instability exists thecorrelation between any two of them, the correlation coefficient is notentirely the same, but outside this inner relationship between indicatorsassociated impact also makes the index system with respect to the roleof financial instability mechanism to generate large chain reaction, itis difficult to grasp this chain reflection of specific interpretationand it is the focus of the follow-up study of the index system of China’sfinancial instability; Secondly,the determined by sentiment index offinancial instability index system reflection on the corresponding indexattribute running advance indicators of China’s financial instability hasplayed the warning signs simultaneously calculates the ultra-earlyoperation of China’s financial institutions and macroeconomic policymakers to provide some reference value threshold size up the situationin conjunction with each of the indicators take timely and appropriatemeasures to stabilize the financial instability which may occur; Thirdly,the financial instability index system of weights determined, enablingeach indicator, the influence and importance of the entire index systemwhich is intuitive in front of us of macro-prudential management shouldprioritize grasp what is able to have a greater impact on our financialstability trend, thus requiring, doing circumvention of financialinstability and dispersion; fourthly, by quantitative method to determinethe index system of financial instability threshold and the warning area, is not only a major breakthrough in the research of the indicator system,enriched the theory of financial instability study but also found thatindicators of financial instability threshold internationally acceptedstandards there are still some differences, it is need China’sfinancial and macroeconomic regulatory authorities, it should be for ourown situation, the timely adjustment of the country’s macro-prudentialmanagement policies, as soon as possible to protect the work of theFinancial Stability coordination mechanisms established in line with ourown characteristics, and strengthen coordination and cooperation betweenthe various macro-prudential management department, combined with theexisting financial risks disposal to formulate the times of crisistreatment programs, as well as emergency measures, the fight for themaintenance of financial stability as soon as possible doing withinternational standards, taking into account of their own situation.Finally it is needed to point out that because of the inherent flawdue to the limitations of the available data and research methods, theempirical studies of financial instability index system has yet to befurther discussion, at the same time, how the financial instability indexsystem in the theoretical study is applied to the actual process of itsimpact on China’s macroeconomic, and it is still needed to do furtherresearch in the future financial instability in the theoretical studydevoted ourselves to difficulties. On the basis of existed research,thewriter will be adhere to the study of this subject in the next learningand working.