Construction And Comprehensive Evaluation Of Financial Security Index

Since2005our country joined the WTO, further opening of China’s market economy, the economy increasingly globalized, financial progressive liberalization. This will not only bring good to the country’s development opportunities, but also to bring a certain degree of risk. China is facing more complex external economic environment, while China’s economic environment also affected to a large extent. While in2005the reform of China’s exchange rate system, the implementation of a managed floating exchange rate brake, the RMB exchange rate volatility has become the norm. RMB exchange rate volatility on China’s economic and social development and progress seems to have a great impact, and thus our financial security has also brought a certain influence. In the global economy if economic background, the effect of exchange rate fluctuations of the RMB against the impact of China’s financial security has become a hot issue of the whole society. Therefore, in this paper, based on the financial security to make a comprehensive evaluation on the analysis of the impact of the RMB exchange rate on China’s financial security. This article from the five sectors.The first part of this paper analyzes the economic situation at home and abroad the background and significance of the topic of this article, analyzed from both theoretical and practical significance. Then elaborated literature scholars at home and abroad over the years, as a theoretical research paper background and premise. In related economic background and based on the theory proposed research ideas and research methods. In this paper, using principal component analysis and a method based on the pulse response of the VAR model analysis. Finally, this paper summarizes the innovation.The second part, exchange rate fluctuations and financial security of the theoretical analysis. Exchange rate fluctuations, the financial risks associated with the financial crisis, the definition of the theory of financial security to start to analyze the relationship between financial risks, the financial crisis and the financial security of the comparison. Since the expression of the financial crisis there are three:the currency crisis, banking crisis and the debt crisis, we theoretically study analyzed the impact of exchange rate fluctuations on the currency crisis, banking crisis and the debt crisis.The third part, the establishment of financial safety evaluation system. According to the relevant literature review, the majority of financial security to build a comprehensive rating system is mainly to study the macro, meso and micro levels. Based on relevant theories, mainly from the country’s macroeconomic environment, the safe operation of financial institutions, foreign financial security and financial software environment to run four levels on selected75indicators to build financial security index system of our country. However, due to objective and subjective reasons, part of the data can not be accurately value, part of the data due to the caliber of research questions, we extracted the23indicators in the index system from75principal component analysis to build a comprehensive evaluation system of financial security. Comprehensive evaluation of commonly used methods are entropy method, AHP and principal component analysis, here is the reliability and accuracy of the evaluation system considerations, we choose the principal component analysis to build a comprehensive evaluation system, using spss18.0software research and analysis. Using principal component analysis, we extract from the23indicators in the four main components, giving each of the main components of the corresponding weights calculated the initial data of a comprehensive evaluation system. Economic situation at home and abroad for our financial security situation analysis.The fourth part, the impact of fluctuations in exchange rates of RMB against the effects of China’s financial security analysis. Based on our evaluation of the financial security, analyzes the impact of exchange rate fluctuations of the RMB against the effects of China’s financial security. Still from the national macroeconomic environment, the safe operation of financial institutions, foreign financial security and financial software environment to run a detailed analysis of four levels. Not every level indicators can be well reflected in all levels of the security situation, so from within each level of the index and extract the security situation is well reflected in financial indicators, a total of eight indicators for analysis. This part of the research methodology is based on the VAR model impulse response analysis, using eviews6.0analysis. According to the relevant definitions and research methods, made the RMB exchange rate for each of the major indicators of the four levels of the impulse response graph, draw the impact of RMB exchange rate fluctuations on various indicators to arrive at the knock-on effects on our financial security.The fifth part, the relevant policy recommendations and conclusions. Based on the above analysis of the various sectors, from both the macro-and micro-economic situation in the country gives financial institutions related proposals, such as:the establishment and improvement of our financial institution-building, the establishment of comprehensive evaluation index system in line with our financial security characteristics, full-warning mechanism to strengthen financial institutions. Summarizes the conclusions and deficiencies of the paper.