The Impact Of Foreign Banks' Entry On The Stability Of China's Banking Industry

Bank stability is the core and key to financial stability,especially in today's background of financial globalization and information globalization,banks are facing turbulent domestic and international financial situation,changing,high –risk uncertainty,under pressure of asymmetric and instantaneous diffusion information,high frequency and short interval of the occurrence of financial crisis and banking crisis.Therefore,it is of great theoretical significance and practical value to research the stability of the banking system.In recent years,China has continued to relax restrictions on foreign banks.China's banking sector has been fully open to the global market since December,2006.Foreign banks who coveted to huge Chinese market accelerate the localization process,accompanying huge attack.even if the global financial crisis in 2008 can not stop the pace of expansion of foreign banks in china.Bank is the core of financial system In China,the stability of banking system is crucial to the sustained and stable development of China's economy.The entry of foreign banks Will affect the stability of China's banking system or not,what the impact is,in which way and how will China's commercial banks and the banking supervision institutions cope with.This paper is based on these ideas to research the impact of foreign banks entry on China's banking stability.About this issue,foreign academia took use of the countries in Latin America,Eastern Europe and the ASEAN to do the study and mainly focused on the analysis of the performance of the countries.There are not many studies on the bank stability of China.In this paper,the author take use of the studies of the domestic and foreign scholars,analyze the impact of foreign bank entry on China's banking system stability.In this paper,the author use qualitative and quantitative ways of analysis.The qualitative analysis is to explain the history of foreign banks' entry and changes of banks in China,especially changes of bank stability.The quantitative analysis is putting forward the hypothesis of foreign banks' entry will affect domestic banks' stability,then establish linear regression model to make empirical analysis.The paper choose data from 1999 to 2016,which contain the whole time after China's accession to the WTO.We first analyze the relationship between the two factors from2001 to 2012,then from2001 to 2016,which makes the analysis more objective,then put forward the corresponding policy recommendations based on the above analysis.