The Study On Macro-factor Inducing Pathway Of China’s Commercial Bank Crisis

The study of bank crisis’s inducing factors and transmission controlling is always important. The banking system is critical for financial system and the whole national economy. The banking system is made up of individual banks whose accumulated risk will lead to banking system crisis. While a large-scale bank crisis will threatens the national economy security. As a result, identifying the inducing pathway of an individual bank’s crisis is meaningful for avoiding system bank crisis.This paper systematically reviews the literatures from four aspects including the definition of bank crisis, the indicators selection, the existing methods and the causes of crisis. On the basis of literatures, this paper puts the theoretical issue-The structural equation model(SEM) on macro-factor inducing pathway of China’s commercial bank crisis. The bank indicators are selected according to CAMEL rating system and the Guide of Commercial Bank Supervision Rating. According to the practical significance, this paper selects ten apparent variables including five for banking latent variable, three for macro economy latent variable and two for social psychological expectation latent variable. After that, it uses structural equation model to express the relation of latent variables, identifies the pathway of macroeconomic factors on China’s bank crisis.On the basis of theory above, this paper uses eighteen listing commercial banks’data from2003to2012to make empirical analysis. It recognizes the indirect macro-factor inducing pathway of China’s bank crisis. And the empirical results verify the validity and the economic applicability of apparent variables.There are two major innovations in this study. On one hand, it constructs the macro-factor inducing pathway model of China’s commercial bank crisis and solves the direct and indirect effects of macro-factor changes on banks’risk defense ability based on the analysis of bank crisis causes. On the other hand, it uses structural equation model to analyze the pathway of bank crisis. It explores the transmission path load of latent variables on bank crisis. It covers the shortage of single indicator’s one-sidedness and limitation on bank crisis analysis.