Research On The Measurement Of Regional Financial Risks In China

The international financial crisis that broke out in 2008 is a major cross regional financial risk event in recent years.It has plunged the world economy into a downward adjustment that has experienced the longest time,the widest range and the deepest impact since the Second World War.The serious consequences of the crisis and the subsequent years of risk management and response have prompted people to pay more attention to financial risk,and have more historical samples and empirical evidence to explore the mechanisms related to the generation and evolution of financial risks,and have developed more diversified research perspectives.As far as China is concerned,the long-term policy stimulus and the unique economic development model of local governments have not only brought rapid economic growth,but also accumulated financial fragility and aggravated environmental distortion,resulting in the severe situation of financial risk prevention and control.China’s major financial risks have occurred within certain specific regions,especially in Wenzhou,Zhejiang,Inner Mongolia,Ordos,Shenmu,Shaanxi and other regions in recent years,which makes us realize that for a country with huge economic geographical space and obvious heterogeneity between regions,financial risks will show more regional characteristics and the consequences.Based on the above cognition of the overall environment and historical samples,this paper selects the perspective of regional financial risk to carry out relevant research,mainly including the following contents:First of all,it is necessary to understand the regional financial risks based on our country’s actual conditions.Chapter 2 defines the connotation of regional financial risk in detail,summarizes its characteristics,and makes theoretical analysis on the internal and external factors of regional financial risk based on the current reality.This paper focuses on the unique local economic development model,the fragility of the financial system and the regional environment.In terms of the dynamic evolution of financial risk,this paper focuses on the multiple channels of interaction between the various institutions within the financial system,between the financial system and the government,enterprises,households and other departments,as well as between different regions and regions,explores the infection mechanism inside and outside the financial risk region,and gives a theoretical description and explanation of the evolution and development of regional financial risk.Secondly,the regional financial risk measurement index is constructed to identify the regional risk status and its causes in China.In chapter 3,we use the entropy method to synthesize the risk measurement index to measure the time-varying characteristics of regional financial risk in various provinces of China.The results show that from 2009 to 2017,China’s regional financial risk showed a fluctuating upward trend,and the financial risk level of most provinces in 2017 was significantly higher than the risk level during the global financial crisis after 2009.In terms of risk contribution,local government debt burden is the primary risk factor,while credit related issues and real estate bubbles are also significantly more important than other factors.This part also uses KMV default model to measure the local government debt risk,describes the severe state of local government debt risk in China,further supports the conclusion of risk measurement,and paves the way for the follow-up research.Third,focus on the public sector of the government and describe the impact of local government debt on regional financial risks.The public sector of government is the primary source of regional financial risk.In Chapter 4,we use the spatial Durbin model to analyze the provincial regional financial risk and local government debt risk in China,and empirically test their spatial correlation mechanism.The results show that the local government debt risk has a strong spatial spillover effect on the regional financial risk,and both have resonance effects;The regional financial risk has a strong spatial spillover effect,and improving the economic foundation,financial environment,legal environment and economic participants will play a positive role in easing financial risks and local debt default risks.Fourth,focus on the real enterprise sector,empirical evidence of the relationship between industrial structure changes and regional financial risks.The enterprise sector is also an important source of regional financial risks.Chapter 5,based on the perspective of the three industrial structures and the development of some important industries,analyzes the impact of industrial structure differences on regional financial risks.The fixed effect panel model is used to investigate the relationship between the results of industrial structure adjustment and regional financial risks.It is found that the increase of the proportion of the secondary industry can reduce the regional financial risk on the whole,while the overall impact of the proportion of the third industry on the risk measurement is positive.In the secondary industry,the influence of industrial ratio on regional financial risk is negative,while the influence of construction ratio is positive.In the tertiary industry,finance,insurance and real estate industries have a positive impact on regional financial risks,while transportation,warehousing,post and telecommunications industries,as well as wholesale and retail industries have a negative impact on the whole,accommodation and catering industries have no significant impact.The panel vector autoregressive model and the corresponding impulse response function are used to analyze the dynamic path of the influence of industrial structure on regional financial risks.The empirical results not only further verify the influence of the secondary and tertiary industries on regional financial risks based on a dynamic perspective,but also further reveal the dynamic relationship between major industries such as industry,construction industry,financial insurance industry,real estate industry with regional financial risks.Finally,from the perspective of real estate bubble contagion,this paper analyzes the spatial correlation effect of regional financial risks.Spillover contagion is an important feature of regional financial risk.Chapter 6 focuses on the real estate bubble,which is an important cause of regional financial risks,and uses the dynamic DY connectivity measurement method to empirically investigate the spatial correlation of regional financial risks.The research shows that the overall connectivity measurement results of various urban groups in China can better capture the state of the real estate market in recent years.Among them,the high level operation from 2016 to 2018 and the recent significant increase in connectivity indicate the cross-regional linkage phenomenon of financial risk driving factors at corresponding time points.In addition,from the perspective of the real estate market relationship between various urban groups,there is a continuous and high positive relationship between the first-tier cities and the new first-tier cities,second-tier cities,and third-tier cities.At the same time,the net spillover effect of the first-tier cities on the second-tier cities and the third-tier cities has weakened in the near future,while the net spillover effect of the second-tier cities on the new first-tier cities and the third-tier cities has recently strengthened significantly.The above empirical results not only describe the direction and intensity of the real estate bubble propagation,but also provide a governance basis from the perspective of regional correlation for controlling the important risk-causing factor of the real estate bubble.On the whole,according to the understanding of regional financial risk,measuring regional financial risks,identifying important risk factors,characterizing the mechanism of risk factors,and analyzing the basic logic and sequence of risk spatial correlation mechanisms,this paper gives a quantitative description of China’s regional financial risk from multiple perspectives,which has positive theoretical significance for China’s financial risk prevention.