The Study Of Early-warning System About The Risk Of Finance Internationalization Of Shandong Province

Recently regional financial industry has been an important part of the state’s whole finance system. Only when the regional financial industry is stable, can the state’s economy and finance operate healthily. Along with the interest rate liberalization and RMB internationalization currently in China, the “going out” trend of regional financial institutions is becoming increasingly evident. On one hand, this trend brings more opportunities for local economy and finance to learn and develop. On the other hand, regional financial industry’s development is facing more challenges because of the influence of the strong externality. The possibility of regional financial risk is gradually increasing.As a result, more attention has been shifted to the study about the establishment of financial risk warning system has attracted.By analyzing existing researches, it is found that at the present stage, there are many studies about the establishment of financial risk warning system for the state’s financial industry as a whole, but few about the establishment of financial risk warning system for regional financial industry, especially for Shandong Province specifically. At the same time, most of these researches selected index from the micro, meso and macro aspects, so the selection of the index about finance internationalization lacks reference, leading to the imperfection of the financial risk warning index system. The risk warning system is disconnected to the real situation of the financial industry development and cannot reflect the risk situation of current financial industry’s development truly, timely and accurately. Therefore, I took the financial industry in Shandong Province as an object to study. I considered the choice of regional financial industry’s internationalization index especially and explored to set a risk warning system that was suitable for the financial industry’s internationalization in Shandong Province.First, based on the domestic and abroad existing study about risk warning, I introduced current situation of the financial industry’s development in Shandong province from three aspects: first, the whole condition about the development of the financial industry; second, the development trend of financial institution; third, the process of finance internationalization. Thereby I could analyze the contributing factor of the risks in financial industry’s internationalization in Shandong province so I could lay the foundation for the establishment of index system. Second, through referring to the research made by other scholars, considering the condition that regional financial industry is influenced by “three aspects” and combining the specific situation of the development of the financial internationalization in Shandong province, I constructed first-level-index system for financial risk warning in Shandong Province from three aspects: external environment, internal region and financial internationalization. Then I segmented each aspect, setting a second-level-index system consisting 6 index groups and a third-level-index system consisting 41 indexes and determined the safety interval of each index. Third, I used a combination of objective weighting and subjective weighting, setting the weight for each index through AHP method and entropy method. I used detailed data to analyze the risk condition of financial industry internationalization in Shandong Province empirically, finding that the whole development of financial industry internationalization in Shandong province is in good situation, with a few indexes having risks. Finally, I put forward policy suggestion to prevent and deal with the risk appeared with the development of financial industry’s internationalization in Shandong Province.