Research On Risk Early Warning Of China’s Commercial Bank Based On Cox Survival Model

With the rapid development of economic globalization, the global trade has become increasingly close following the development of science and technology, the financial risk as the result of good exchange and capital exchange has become the main problems and difficulties rooted in the process of development in the world. Commercial banks as a financial institution is an important part of the economic society, essentially speaking, is of a great operational risk, economic system reform process in China, it played an important role as an indirect financing intermediary. Especially the investment bank closures trend due to the outbreak of the financial crisis in2008, its business risk has emerged, and it quickly spread to other economic entities, which caused serious chain reaction to the manufacturing enterprises. Since2010, China’s commercial banks began to implement international standards the "new Basel Capital Accord", having strong risk management ability has become a basic requirement whether it can have a steady and healthy development for the Commercial Bank in our country.According to the risk forms of commercial banks, the commercial bank risk is divided into credit risk, market risk, operational risk and liquidity risk, an early warning index system is erected according to the "Basel III" and China’s "bank capital management approach" which combines with the economic characteristics of China. Secondly, on the basis of the collected sample data, the principal component analysis method is used to reduce the dimensionality of indexes. Thirdly, the comprehensive score method of principal component analysis is selected to be determination basis as bank survival state, and at the same time, Cox survival function model is also used to predict, the two forecasting results were compared. The conclusions are as follows: the prediction results of principal component comprehensive score and Cox survival function are basically the same, but the survival analysis method combines with more factors, and is more objective, the prediction of survival probability has more degree of distinction, so it is more suitable for actual analysis. In this paper, survival analysis is applied in economic field to study the financial risk early warning, which provides a new idea for the bank risk warning, it provides the theoretical and practical value for comprehensive risk management of commercial banks in china.