Research On Financial Risk Pre-warning Of H Rural Commercial Bank

With the changes in national policies and requirements,China’s rural commercial banks have become more and more important in the banking system,and their influence on the political economy is also growing.However,rural commercial banks always have problems that cannot be ignored,for example,the non-performing loan ratio is too high,the level of risk control is seriously inadequate and so on.These problems are important factors leading to the potential financi al risks of China’s rural commercial banks,and may even directly lead to the occurrence of financial risks of banks,while the rural commercial banks manage before the crisis.However,the means and experience of the field are extremely lacking.Under the background of the expansion of rural commercial banks,the high level potential financial risks of rural commercial banks,and the lack of early warning methods for financial risks of rural commercial banks,this paper establishes a complete and effective Financial Risk Pre-warning System for H rural commercial bank for research.This paper firstly sorts out relevant literatures at home and abroad from three aspects: definition of financial risk,control of financial risk and early warning of financial risk.Secondly,taking H Rural Commercial Bank as the research object,a series of indicators were selected from four aspects: capital adequacy risk,asset quality risk,liquidity risk and profit level risk.The entropy weight method and Pearson correlation analysis were used to analyze the primary selection indicators.After screening,the entropy weight method is used to empower each individual indicator.Then,the Financial Risk Pre-warning indicator system and model based on the efficacy coefficient method are constructed for the bank,and the validity of the model is verified.Thirdly,the model is used to analyze the financial risk status of H Rural Commercial Bank.Finally,relevant measures are proposed from the perspective of ensuring the normal operation of the Financial Risk Pre-warning system.From the research in this paper,we can find that the improved efficacy coefficient method is effective for early warning of the financial risk of the rural commercial bank,but the establishment of the financial risk early warning system still needs some safeguard measures to operate normally.The H Rural Commercial Bank should improve the awareness of financial risk early warning,establish a Financial Risk Pre-warning system and ensure its normal operation,in order to prevent and resolve financial risks in a timely manner,improve its financial risk level,and maintain the stability of the local financial environment.