The Empirical Study On Non Perforing Loans Of Commercial Banks In China

In recent years,the non-performing loan ratio of commercial banks in China is relatively stable,but the amount of non-performing loans is rising,and the asset situation is worrying.The purpose of this paper is to use the pressure test to study the impact that commercial banks may attach in extreme cases.As a result,this paper also intended to give advice to bank management that they should strengthen the risk management and improve the ability to deal with the impact of risk.In this paper,we use the quarterly data of the commercial bank non-performing loan rate and the 6 macroeconomic indicators from 2009 to 2016.Through the stepwise regression using Eviews software,we choose three indicators which have significant impact on the rate of non-performing loans,including the Money Supply(M2),the Loan Interest Rate(LR),the Consumer Price Index(CPI).This paper analyzes the influence of macroeconomic fluctuation on the non-performing loan ratio of Chinese commercial banks by the method of scenario hypothesis.We constructed three kinds of pressure conditions,the results show that the system of China's commercial banks non-performing loan ratio was greatly improved when the Money Supply,the Loan Interest Rate and the Consumer Price Index fell sharply.This paper also used the "IRB" on the rate of bad loans of commercial banks to conduct stress tests,the method to calculate the risk covered enough capital credit losses to cover extreme situations.