An Empirical Study On Banking Openness And Financial Security

With the development of economic globalization,countries financial system ever closer, but in2007, the United States has undergone a subprime crisis. People began to think about financial openness deeply. The openness of the banking sector has a significant impact on the national financial security and social development, our country is in economic restructuring, foreign banks’ penetration bring developing opportunities for Chinese banks, but also bring financial security threats for our country, how to grasp the relationship between financial liberalization and financial security has become an important topic of current.This paper first describes the theory of financial security and compares related concepts; then analyzes what impact can opening up a country’s banking sector on the financial security theoretically, and discuss the international’comparison; then from foreign banks’ entry and the introduction of foreign strategic investors, we enforced empirical research. We selected the2004-2013data of10banks to discuss the impact about the foreign banks’ entry on China’s financial security, we can measure the situation of foreign banks’entry by the number of foreign banks and the share of foreign banks, we can use efficiency indicators to measure the domestic banking sectors’ financial security. The results show that the impact of foreign banks enforce to China’s banking is complex,which the share of foreign banks is positively correlated with net interest rate and have negative correlation with pre-tax profit margin and ROE. While the share of the market and the number of entering have negatively correlated with non-performing loans ratio and the cost to income ratio.we also study the financial indicators about introducing foreign strategic investment of five banks before and after, including the operating efficiency indicators (ROE), a prudent business indicators (capital adequacy ratio) and asset quality indicators (NPL ratio). The results show that with the introduction of foreign strategic investors,net interest income of China’s banking industry is increasing year by year rate, and constantly improve the capital adequacy ratio, non-performing loan ratio of banks is declining.Based on the theoretical study abroad, we carried out several innovative research, mainly reflected in:First, we give a clearer definition about the financial security and distinguish related confusing discrimination; Secondly, from foreign banks’ entry and the introduction of foreign strategic investors, we carried empirical research, make a comprehensive analysis about what impact about opening up the banking sector can bring to China’s financial security; Finally, we make a international comparison about banks’ openness and financial security.