Research On The Impact Of Cross-regional Operations Of City Commercial Banks On Their Credit Risk

As the product to resolve the regional financial risk,City Commercial Banks has been developed rapidly due to its unique advantages in the local economy under the support of the local governments,which is incomparable compared with other commercial banks.In the process of its continuous exploration,City Commercial Banks began to replicate the development model of the Large-sized Commercial Banks,and expand its business scale and regional scope of activity actively,which seems to go against its target of providing service for small and medium-sized enterprises and regional economy.Accordingly,the regulatory authority's policy on its cross-regional operation has also experienced a ‘forbid-loosen-cautious' process,and disputes among domestic and foreign experts and scholars on whether it should deepen cross-regional operation have never stopped.Since Bank of Shanghai opened its first branch outside the city in 2006,City Commercial Banks' cross-regional operation road has been going for nearly ten years.In order to provide a reliable basis for the development of city commercial banks,it's time for us to make an objective assessment of the impact on City Commercial Banks' credit risk.However,the relevant research is relatively rare in China.Therefore,this paper tries to explore this issue from the perspective of credit risk in order to obtain a valid conclusion.First of all,this paper takes Bank of Beijing as a case,analyzes its cross-regional operation using the SWOT analysis method,and discusses the changes of the bank's credit risk in the cross-regional process.Then,the paper selected 18 City Commercial Banks of different scales as samples,using their relevant data from 2006 to 2014,by establishing of a random effects model,analyzes the relationship between City Commercial Banks' credit risk and the degree of their cross-regional regression.The author believes that City Commercial Banks can effectively reduce the loss caused by regional economic fluctuations and the risk of loan default.At the same time,this paper also object to City Commercial Banks' blind pursuit of geographic expansion.AT the end of this article,on the basis of the analysis above,the paper puts forward suggestions to the regulators and City Commercial Banks.The innovation of this paper lies in that it tries to breakthrough the current situation of qualitative analysis of the cross-regional operation of City Commercial Banks in China.In this paper,combined case analysis with empirical analysis,the author studies the whole time span of City Commercial Banks' cross-regionaloperation,and discusses the effect thus produced on credit risk caused by cross-regional operation.