An Empirical Study On The Impact Of Economic Fluctuation On The Systemic Risk Of China 's Banking Industry

Finance has become the centre of modern market economy, financial activities and financial behavior has penetrated into all fields. Preventing financial risks and maintaining financial security has become a problem on the road to China’s economic development, how to guard against financial risks and reduce economic volatility has important significance. In recent years, with the accelerating process of financial deepening, financial markets have become a huge network of financial markets, which will enhance the relevance of financial instruments.Banks is the main part of financial system, but banks are the most concentrated areas of macro-control policy authorities. Frequently fluctuations of the economy has further transferred to the banking industry, its volatility due to the financial accelerator effect is amplified, can easily lead to the risk of banks. Stability of the banking system is the focus of contemporary academia and regulatory bodies concerned for the realization of the bank’s risk management and controlling, we must realize the accurate measure of systemic risk.At present, in order to solve this problem, scholars’ suggestion is to create a comprehensive system of measurement, and volatility of a security index is a measurement of banking security. Based on this, the first occurrence of systemic risk from the process of starting and looking macroeconomic volatility reflects the bank’s internal operations, and many other indicators of bank systemic risk, select the data in 1996 and 2013 the banking industry and form banking systemic risk index (BSR). Secondly, the paper selects important macroeconomic variables to create bank systemic risk index (BSR) for empirical analysis. Through setting up VAR model, we can get the following conclusions:(1) GDP growth rate, the impact of inflation has the biggest impact on bank systemic risk index. However, the two variables have shown different effects on results. GDP growth rate, the higher the bank systemic risk, the higher the inflation rate within a certain range, but it can increase the security of banking, based on this conclusion. (2) fixed asset investment, although will increase the bank systemic risk, but this effect is very weak, so the change to our financial security does not have a particularly large impact; (3) exchange rate fluctuations clearly has a negative impact on the soundness of the banking system, but the exchange rate for the impact of international trade is indirect, immediate, and its impact on the bank is indirect and limited.Finally, according to the results of theoretical and empirical analysis of this paper, this article will put forward some policy recommendations.