The Safety Evaluation Of China’s Banking Industry Based On Principal Component Analysis Method

As we all know,finance is the core of modern economy.As an important part of financial institutions,banks played the role of providing funds,liquidating financial transactions,depositing and managing financial assets in financial activities,so we can say banks are the core of fiance.As the hub of currency circulation and money transfer,banks are the bridge that connected money providers and the people who need money,they provided a safe investment model for the money that lying idle in our society,at the same time they supported many recently emergent industries and many firms that at their early stage.The financial system of our country is not perfect,which make it hard for many firms,especially small and medium-sized enterprises get money directly through the issuance of stocks and bonds,they have to rely on banks for indirect financing.Banks are not only the important guarantee of capital chain,but also have irreplaceable function in the activities such as adjust the industrial structure and the execution of our country,s national strategies.The security situation of banks not only impacted the construction of our country,s socialism market economy,but also influenced the function of the whole national economy system.What,s more,as one part of economic security,the security situation of banks have an important impact on our country,s security.So,the significance of the research on the issue of banking security goes without saying.In the financial crisis happened in 2008,the bankruptcy of Lehman brothers and the purchase of Merrill Lynch and Bear sterns gave a wake-up call to the banks.The research of banking security in our country had a deep background:With the opening of capital market deeper and winder,more and more foreign banks came to our country,they brought “catfish effect”and technology spillover effect to domestic banks,injected dynamic into domestic banks,but the enter of them also caused the competition of customers and market between foreign banks and domestic banks,which impact the security of domestic banks.The slow down of economic growth,the arise of internet financial,the cooling down of the real estate industry,the existence of shadow banks threat the security of banks.The set of private banks enriched banking system,as while intensified the difficulty of regulatory;the cut-throat competition between banks and the emerge in an endless stream of financing products caused the chaos to the banks;the imperfect organization structure and the moral decline of bank clerks when they faced temptation are incipient fault to the security of banks.At first the writer introduced the background,the significance,the means and the frame of this paper,then commented the documents that have something to do with the security of banks both in China and foreign countries after divided and analyzed them.In the following section the writer stated the development status of Chinese banking industry form market structure,performence and opening.Studied the factors that affect the security of banks and the influence way of them form the view of macroscopic,micro level and microcosmic. Then the writer evaluated the security situation by used the principal component analysis method,found that in 2009 to 2013 the security of banks in our country improved in the mass,but there are some factors affect it. At last,studied what government,banking association and banks should do in order to protect the safe of domestic banks.Government as the regulator of banks should change his function,perfect the market access mechanism and the external supervision mechanism,reinforce the supervision of foreign banks,provide environment for the development of domestic banks.Banking association as the self-regulatory organization should undertake the responsibility of breathing safety consciousness into member unit,urging banks observe disciplines and obey laws,providing suggestions to the regulatory sector.Banks as the ultimate unit of protecting the security of banks should perfect the internal governance mechanism,cultivated competitive advantage and establish talent mechanism.The writer add internal governance index and banking climate index in the process of evaluating the security of our country’s banking industry,which enriched the evaluation system.