The Impact Of Non - Interest Income And Asset Size On The Stability Of China 's Commercial Banks

In recent years, the proportion of non-interest income and asset size of China’s commercial banks are showing a steady upward trend. According to the historical experience of foreign banks, the change of revenue structure and scale often affects the stability of the banks to a certain extent. This paper, using the theoretical analysis and empirical research, studies the effects of non-interest income and bank size on bank stability.This article, at first, introduces what the non-interest income and bank size are. Then this article reviews the theories and the literatures in this field. On this basis, this paper chooses data of15banks in China from1997to2011, and establishes a panel data model. After analyses on the risk conduction path of non-interest income and bank size, there are two main conclusions as follows:1. The economies of scale caused by assets expansion reduce the average costs of bank, which is conducive to the stability of commercial banks. This point means banks in china are still in the stage of economies of scale.2. With the improvement of the non-interest income ratio, the stability of banks firstly decreases then increases when it reaches the highest value.