Study Of Early Warning Index System Of The Rural Small And Medium-Sized Banks

The Rural small and medium-sized bank is an important part of financial institutions in rural financial system. They play a very important role for the development of agriculture, and have made great contribution to the rural economic transformation and upgrading. However, along with our country economic system deeper and deeper, as well as the marketization of interest rate, financial institutions, especially the rural small and medium-sized banks are facing with greater risk. Compared with general financial institutions, rural small and medium-sized banks have great differences in both capital scale, equity structure, management level, and the operational mechanism. Within these reasons, their ability to withstand shock are weaker, which makes their space that to release risk is limited. Therefore in the face of the risk conduction, rural small and medium-sized banks are more fragile than general financial institutions. They are also condemned easier to exit the market. For these reasons, early warning to the rural small and medium-sized banks of the danger of exiting the market is particularly necessary.This paper analyses the characteristics of the rural small and medium-sized banks, and the necessity of the early warning to exit the market. Then, built a early warning index system of small and medium-sized banks, which contains five primary early warning indexes and17secondary warning indexes. Using the analytic hierarchy process (AHP) to determine the weight of each index, then, determine the index of the threshold and the scoring method. Through the method of field researching, this paper chose four rural commercial banks as samples. The data is from2011to2013. According to the scoring method for operation, it is concluded that the sample bank’s warning index in each of the comprehensive score. Results show that the four sample banks are done well in the lately three years, and the degree of market exit warning is relatively low. Using the factor analysis method, this paper to calculate the three years’score of the sample banks. The score and the rank of the results are basically consistent with the score that the early warning index system have made. According to the descriptive statistical analysis and empirical analysis it is concluded that the rural small and medium-sized financial institutions market exit warning degree is low, the overall temporarily anti-risk ability is lower than the general financial institutions and so on. According to the conclusion, the paper at last made some suggestions all from the aspect of the rural small and medium-sized financial institutions and the regulatory authorities. This paper proposed to build early warning system market exiting, to improve the quality of assets, improving the structure, and such as establish a statistics database, etc.