Research On The Construction Of The Early Warning System In Chinese Commercial Banks

Sub-prime Crisis has made a tremendous shock to the global real economy and financial markets, thus the role of financial regulation in keeping financial stabilization has been more and more important.To China, it is an necessity to establish a forewarning system for commercial banks to nip in the bud.But there are some disadvantages and hidden troubles in China's commercial banks risk management. Therefore, we must take precautions to set up a more scientific and feasible forewarning system in order to safeguard our commercial banks.From the point of view of operation and management, this study introduces identification and analysis on the characteristics, classes and causes of China's commercial banks risks. On such basis, this paper compares and concludes the relative experiences of advanced countries, uses quantitative and qualitative methods to build a system of early warning indicators of risks, and thus makes a comprehensive evaluation of risk analysis, combined with the forecast time series analysis, designs an early warning system model which is adapt to China's commercial banks. Finally, this paper makes an empirical research with a sample bank.The results of investigation of the early warning system in this paper will provide scientific and useful method to discover the risk existing in the loan. And this paper also gives some good suggestions to perfect the system of Banks of business. To some extent, this paper makes an effort to complement the present theories and studies.