Study On Non-interest Income Impact On The Risks Of Banks

The " The Gramm-Leach-Bliley Act" of the United States established in 1999 leading the beginning of mixed banking operations in the new century,and the non-interest business of the US banking industry has developed rapidly.Since the subprime crisis in the United States in 2008,international commercial banks have begun to become more cautious about real estate loans,and have instead paid more attention to the development of non-interest business.Non-interest business income became a new growth point for banking business and became the consensus of all commercial banks.In our country,as China's accession to the WTO,China's commercial banks are gradually in line with the world,and the financial environment and financial situation at home and abroad have undergone tremendous changes.Commercial banks changing from a traditional single-spread-paying service structure to the development of diversified operations rapidly,and that has become the universal transformation direction of China's banking industry.However,compared with the ratio above 40%of non-interest income from commercial banks in developed countries,the non-interest business of China's commercial banks has huge room for development.However,with the expanding of the non-interest business of the commercial banks,whether it brought the greater risks has become a problem explored by many scholars.This paper takes the panel data of 25 commercial banks listed on China's A-shares from 2006 to 2016 as the research object,and divides the 25 listed banks in China into three types,they are large state-owned banks,joint-stock banks,and city commercial banks.The impact of non-interest income and its largest internal accounting fee and commission income,and investment income on the risks of different types of commercial banks was analyzed and compared in depth.The results show that:from a whole point of view,the expansion of non-interest business of commercial banks has no significant impact on bank risks,but from the perspective of large commercial banks,it can reduce the overall business risks in the expansion of non-interest business,especially fee and commission income.Joint-stock banks will increase bank operating risk and bankruptcy risk when they increase non-interest income and fee and commission income.From the perspective of city commercial banks,it can be seen that the development of non-interest businesses,especially investment businesses,will significantly improve their business operations risks.It can be seen that the non-interest business and its internal business composition have different effects on the risk of different types of commercial banks.In comparison,the large-scale state-owned banks have less risks in expanding non-interest business.While the small and medium-sized banks are limited in size,the development of non-interest business will increase its risk level.Overall,this article is consistent with the findings of some scholars,that is,the relationship between the expansion of non-interest business and risks is affected by the size of banks assets.For small and medium-sized banks,the expansion of non-interest business will not reduce the risk,and may even increase its risk level.Finally,this article also gives several suggestions based on the research results.First of all,it should base on the traditional interest business,optimize the internal structure of non-interest business.Then,commercial banks should develop investment business rationally.And strengthen the bank for talent construction.Last,they should strengthen its own risk control,etc.All about this will provide commercial banks a good prevention to control risks.