The Impact Of The Real Estate Price Fluctuation On The Systemic Risk Of Banks

Since the U.S.real estate market bubble burst triggered subprime crisis in 2007,it caused great damage on the global financial order and the real economy.The financial crisis makes regulators aware of the systemic risk of infectious and destructive,it will reach a consensus on the prevention of bank systemic risk as an important index in the regulation.In the financial crisis,compared to developed countries,our country suffered less due to lack of capital market derivatives market which is not completely open and development,but this does not mean that China’s banking system risk is small.On the contrary,China’s financial system is very fragile.The rate of expansion in the real estate market develop rapidly since the reform in 1978.And commercial bank credit support is closely related to the risk of the real estate market,which contains that the commercial banks bear the risk of the real estate market.Once the crisis happened,it will spread inherently to bank system,which is not benefit to the prevention of the bank systemic risk.So this paper mainly studies the effects of price fluctuations in the real estate market to the bank systemic risk,and the influence factors of real estate price fluctuation analysis.After studying this topic,we can explore how to effectively safeguard the healthy and stable development of the real estate market,so as to prevent bank systemic risk.In this paper,through the research on the literature found that real estate prices are through the macro economy,the banking system itself and the stock market channel for banks affect the system risk,and real estate price fluctuation are affected by bank credit scale.After the theoretical analysis of the transmission mechanism,we do the relevant empirical test.The function relationship between the vector autocorrelation model of real estate prices and other macroeconomic factors and the systemic risk of banks are built,and found that compared to the macro factor and the stock market,real estate prices are the most significant factors affecting the systemic risk of banks.Then the results of impulse response analysis shows that the systemic risk of banks to the real estate price fluctuation of the impulse response is not immutable and frozen,but with rising real estate prices showed upward trend after the first drop.Finally,by setting the different situations of the real estate price decline,the author tests the bank’s non-performing loan rate,and points out the extent to which the price drop will lead to the outbreak of systemic risk.And analysis of the bank in different scenarios of the decline in the real estate price under the actual loan loss reserve can compensate for the impact of loan losses,down this part of the gap led to the bank’s equity will threaten the stability of the banking system.Finally,some corresponding policies and suggestions are put forward through the analysis of empirical results to prevent systemic risk of banks.One is to strengthen the regulatory level of the real estate market regulation and legislative efforts.The capital adequacy ratio index as a regulatory tool should be applied to the real estate industry.Another is to build a risk warning system of the real estate market to monitor the real estate bubble,and use the international common indicators to measure risk.Finally,use the real estate loans stress testing to enhance the bank ability to resist the systemic risk.