China’s Banking Systemic Risk And Its Supervision

Suffered heavy losses after the outbreak of the global financial crisis in2008, some of the country’s financial institutions gradually realized the importance of systemic risk for the stability of the macro-economic. During the financial crisis China’s banking industry showed the full soundness and no greater systemic crisis went out, but they also shows more or less risk signal. The rapid expansion of China’s credit crisis, especially the medium-and long-term loans increased concentration of credit. So banks face higher credit risk, credit risk outbreak that could be transformed into a systemic banking crisis. With the deep of global financial integration and China’s financial market opening degree at the same time, foreign economic and financial changes will affect China’s banking industry. We need to develop sound policies to enhance the ability of financial crisis management. In order to mitigate the impact of bank systemic risk, we need maintain the sustained and healthy development of China’s economy. Therefore, by studying the dynamics of international banking supervision and combining with relevant experience, we can propose regulatory measures to China’s banking systemic risk and maintain banking stability. The development of the important theoretical significance for our country will prevent the banking systemic risk and practical significance.This article broadly divided into three frameworks for research, the first systemic risk in the banking sector and its regulatory theory analysis and research. Followed by the combination of the measures and experience of the foreign banking sectors China’s banking sector systemic risk status quo analysis. Though the use of the measure systemic risk model KMV model to the overall analysis of China’s listed banks, drawn China has the possibility of the outbreak of the banking sector systemic risk is small, but a variety of risk factors is increasing and do not exclude the conclusion on the possibility of systemic risk of the banking industry. Finally, we discuss the banking systemic risk supervision and prevention, and analysis of the banking policy, mainly including macro-prudential and micro-prudential regulatory with fiscal policy and monetary policy.