Study On The Relationship Between The Income Structure And The Operational Risks Of Listed Banks

Since China joined WTO in 2001,the economic and financial sector has been gradually opening to the outside world and the financial liberalization and integration trend have been increasingly obvious.The pace of the interest rate marketization in current domestic financial market has been accelerating.Financial regulation continues to relax.The internet finance has been getting rapid development.The type and quantity of financial institutions are increasing.The trend of financial disintermediation has become increasingly evident and the financial market competition has been intensified.Now,banking business transformation has been the trend.As the benchmark deposit and lending rates of financial institutions continue to decline and the market interest rates' flexibility is increasing,the net interest margin profits from the traditional commercial banking business is been narrowed.In order to find a new profit growth point,most domestic listed banks is continuing to explore more non-traditional banking business and have achieved positive results.In recent years,the income structure of listed banks in China has been optimized.But at the same time,the operating risk of listed banks brought by the change of income structure is uncertain.Besides,due to the impact to the listed banks from various uncertain factors of external market,the listed banks have to improve its risk management to a higher level.For listed banks in China,controlling and managing risk is important and necessary whatever considering its own development or considering the external regulations.For this,this paper will make a deep study on the relationship between the income structure and the operating risk of listed banks in China.In this paper,some of the listed banks in China are selected as the research object.Firstly,it introduces the concept of the income structure of listed banks.Then on the basis of summing up the operational characteristics of listed banks which are in business transformation in China,it analyzes the current situation of income structure and the changes in recent years with income structure of listed banks by collecting the data.Besides,it analyzes the current situation of some business which has been quickly increasing in non-interest income.At last,it analyzes the causes of the change of income structure of China's listed banks.Secondly,this paper introduces the overview of the operational risk of listed banks and makes deep analysis on several measurement methods of operational risk,including their comparison.Then it explains the possible relationship between the income structure and the risk.Also,it makes the theoretical hypotheses of this paper.After that,the paper points out the importance of the risk control of listed banks.In addition,this paper uses EViews6.0 to make empirical research on the relationship between the income structure and their operational risk of 16 Chinese listed banks from 2006 to 2015 by collecting data and selecting appropriate variables.The results show that with the increase of non-interest income of listed banks in recent years,it has a significant influence on its operation risk and the linear relationship between the two is "U".In order to explore the impact of non-interest income on the operational risk of listed banks,this paper divides the risk of the listed banks' operating income into the non-interest income business risk,the net interest income business risk and the risk arising from the correlation based on Markowitz's portfolio theory.Using STATA14.0 to analyze their volatility and correlation,the results show that with the increase of non-interest income of listed banks in China,it can play a role in reducing the operational risk of banks,and the contribution of net interest income and correlation(between the net interest income and the non-interest income)to the overall risk of the bank is a little high.Therefore,China's listed banks should continue to develop non-interest income business.Finally,on the basis of the previous research,this paper puts forward some suggestions on how to optimize the income structure and reduce the operational risk of listed banks in China.For example,innovating business varieties,improving the non-interest income pricing mechanism,stimulating the traditional banking business potential and establishing a comprehensive risk management system.