Research On The Associated Risk Contagion Between The Bank And Its Consumer Finance Subsidiary

The consumer finance market has unprecedented room for growth,and more and more commercial banks have achieved the goals of differentiated operations,opening up new markets,and providing consumer financial products through the establishment of consumer finance subsidiaries.However,as of 2019,there are only 24 consumer finance companies.In the development period of only about 4 years,more than 8 companies have been punished nearly 10 times for credit risk control issues,and the maximum amount of punishment has reached 900.Million.The risks of subsidiaries further form a contagious source of transmission and spread,which is transmitted back to the parent commercial bank through complex related party transactions,etc.forming a related party transaction risk.Based on this fact,this article takes the typical Northern Bank "fraud loan incident" in the industry as the main analysis case,first of all,the theoretical analysis of the sources,channels,and carriers of related party transactions in the "connected transaction contagion mechanism" The framework uses the financial demand theory of finance to guide the risk transmission path and reveal how the risk is transmitted to the parent commercial bank.Secondly,the "grey correlation comprehensive analysis model" is used to measure the correlation degree that can measure the association between the commercial bank and its consumer finance subsidiary.As a key indicator,it is brought into the "fractional Brownian motion default model" to verify: the tighter the correlation,the easier the risk of infection.This provides a direction for prevention and improvement of the potential risks of commercial banks.