Identification And Assessment Of Systemically Important Banks

The banking industry plays an important role in maintaining economic stability in financial system. However, the financial crisis in 2008 showed huge damage of outbreak of banks' systemically risk to real economy. Then, people began to pay attention to the identification and prevention of the systemic risk of banks. Basel III stressed the necessity of macro-prudential supervision, and put forward framework and requirements of regulation, which point out higher regulation of SIBs to control the spread of risk. China follows regulation with additional capital 1% for SIBs.When regulations are maturing, how to identify and delineate the SIBs has becoming a problem to explore and study. Referring to the research methods of scholars at home and abroad, this paper did research on 16 China's listing companies through three different methods- indicator-based approach, CoVAR, MES, and tried to order them based on its systemically important score. The results, which matched actual situation, showed size, interconnectedness, complexity and capital adequacy ratio were the major factors of SIBs. Further, this paper compared three methods, and found any one of them was not superior to other methods. In the end, based on previous empirical analysis, this paper proposed some suggestion of supervision.