The Impact Of Banking Openness On Bank Systematic Risk

In the context of expanding financial openness,China's banking industry has gradually deepened.Today,China's banking industry has entered a new stage of opening up.At the same time,the pace of Chinese banks going global has also accelerated.The frequent bank crises in history have made people pay more and more attention to the systemic risks of banks.The 2017 National Financial Work Conference pointed out the need to proactively prevent and resolve systemic financial risks.In this context,the relationship between the opening of the banking industry and the systemic risk of the bank has become a significant and urgent issue.Based on this,this article takes the opening of the banking industry as a research perspective,focusing on the impact of the opening of the banking industry on the systemic risk of China's banks.First of all,this article reads a lot of literature on banking openness and banking systemic risk,and clarifies the possible relationship between the two.Secondly,through the review of the opening process of China's banking industry and the research on the status quo,we understand the opening characteristics of China's banking industry.Thirdly,this paper analyzes the opening policies of the banking industry in major developed countries and the typical cases of opening up of the banking industry in developing countries,and explores the implications of these cases for the opening up of China's banking industry.Then,based on existing research and relevant cases,this paper combs out the mechanism of banking industry opening affecting the systematic risk of banks Finally,based on the data of China's banking industry from 2008 to 2018,we measured the level of China's banking industry opening up and the level of systemic risk of the bank,and constructed a benchmark model and an interactive term estimation model to test the impact of the opening up of the banking industry on the systemic risk of China's banking.Based on the above studies,this article draws the following conclusions:(1)As China 's banking industry gradually expands to the outside world,foreign banks are expanding steadily in China,and their development is generally good.China's banking industry has a low level of internal opening,and the internationalization level of Chinese banks needs to be improved.(2)The United States,Japan,and the United Kingdom have relatively sound regulatory policies on foreign banks.The United States and Japan have more restrictions on foreign banks,and the degree of openness of the British banking industry is relatively high.Argentina,Mexico,and Thailand ignored the level of their economic development during the opening of the banking industry,blindly introduced foreign capital,and adopted a laissez-faire attitude toward foreign capital invasion,which eventually led to the outbreak of the financial crisis.(3)The openingup of the banking industry will affect the systemic risks of banks through competition mechanism,risk spillover mechanism,lack of supervision mechanism,and financial security mechanism.The opening-up of the banking industry internally will affect the systemic risks of banks through inherent risk mechanism and asset dispersion mechanism.(4)An increase in the level of opening up of the banking industry will increase the systemic risk of Chinese banks.An increase in the level of internal opening up of the banking industry will reduce the systemic risk of Chinese banks.The impact of the opening up of the banking industry on the systemic risk of the banks will depend on Micro capital characteristics such as capital adequacy ratio.Finally,the article provides policy suggestions for the opening of China's banking industry and the stability of the banking system from three perspectives: government perspective,regulatory agency perspective,and internal banking perspective.