The Impact Of Loan Concentration On The Systemic Risk Of Commercial Banks

General Secretary Xi Jinping on 26 January 2015 central leading group for the twelfth meeting put forward "supply side reforms to reduce ineffective production capacity, improve the effective capacity, clear the various resources occupied by the zombie companies, especially manufacturing industry, coal, steel, cement, these industries. China’s banking industry in these areas and long-term loans, the degree of concentration is very high, with a substantial decline in the industry profit margins, banks cannot in a short period of time adjustment loan structure, may bring huge risk to the bank itself, through a chain reaction will bring a huge systemic risk to the financial markets. Therefore, we must pay close attention to the influence of the concentration degree of bank loans on the systematic risk.Once the concentration of the loan default phenomenon, then the bank will face a huge liquidity risk. After the risk of a bank, it will spread to other banks, and finally until the infection to the entire financial system, the whole system is facing risks, and finally led to the financial crisis. Therefore, study loan concentration of banking system risk influence and contribution degree, for the commercial banks to actively adjust the loan structure, adherence to systemic risk of the bottom line and how to prevent the financial system risk has important practical significance.Based on the review of relevant literature review, this paper expounds the present situation, connotation and causes of commercial bank loan concentration, and further expounds the connotation and measurement method of the systematic risk of commercial banks. Then, the relationship between the concentration of the loan and the systemic risk of the bank is analyzed theoretically, and the transmission path is analyzed.The author draws on the predecessor’s practice, select 2010-2014 Shenzhen Shanghai two exchanges a total of 16 listed commercial banks as an analysis of samples, and it is divided into three categories. Then according to the Herfindahl index method, modified HHI index based on making loans concentration of three indicators, and calculated; reference Chunjie(2013) method using MES model to estimate listed commercial bank’s systemic risk contribution degree. Finally, based on the relevant auxiliary control variables, the empirical analysis is carried out using the unbalanced panel data. Main draw the following conclusions: listed commercial banks in China, the lending industry concentration degree of systemic risk has a significant positive effect; and listed commercial bank loans regional concentration and customer concentration is between the systematic risk and the negative effect; at the same time, three different types of commercial bank loans concentrated degree for the influence of system risk also have some differences.According to the above research results, we can find the concentration of commercial bank loans three measure and effect on the risk of existence, the supervisor should according to the specific circumstances of the bank loan structure regulation, with particular attention to the lending industry concentration of systemic risk negative effects, combined with the optimization of the industrial structure policy, correctly guide the flow of bank funds industry, in order to prevent systemic risk occurred, so as to lay a foundation for building a harmonious financial environment.