The Stock Market Volatility's Influences On Risk Infection Strength Between Banking And Insurance

The financial industry is the central industry of contemporary society,and we need to prevent the risks that may arise from it.Among the various risks,systemic risk has the most serious impact on our social and economic life.Therefore,the studies on financial risk's generation,transmission,measurement and how to effectively prevent and resolve systemic financial risks have become important topics of common concern among scholars all over the world.At present,scholars have already enriched the research on risk contagion,but most of these studies focus on the risk contagion between different micro-institutions within a single industry or different markets(such as stock market,bond market,foreign exchange).There are few studies on risk contagion among sub-sectors of the finance industry,and often only qualitatively describe the impact of stock market rises and falls on the level of risk contagion.There has been no one quantitatively measuring the relationship between stock market volatility and the level of change in risk contagion yet.Therefore,in order to solve this blank in such research,this paper will quantitatively measure the strength of risk transmission between the banking industry and the insurance industry through empirical means.Specifically,this paper firstly sorts out the more authoritative literatures and more advanced research results of domestic and foreign related risk transmission in the literature review,and then does the analyzes through two aspects of banking and insurance in detail by theoretical analysis.The following analyzing points: the basic connotation of systemic risk,the cause of systemic risk,the transmission mechanism of systemic risk,the reason why the stock market volatility could effect the systemic risk transmission between the banking industry and the insurance industry and finally the core issue of this paper,how the stock market volatility specifically affects the risk of infection between the two industries.The main innovation of this paper is to construct the T-CoVaR model in a pioneering manner,and apply the quantile regression technique to measure the risk transmission intensity between the banking industry and the insurance industry and the stock market fluctuations from a dynamic perspective.The impact and resolve the relationship between the two.The results show that stock market volatility has animpact on the level of risk contagion between the two industries;under the same stock market volatility level,the risk intensity of the banking industry to the insurance industry is often greater than that of the insurance industry to the banking industry;under different volatility levels of the stock market,the risk contagion intensity increases more when the stock market rises as a whole than it falls.