China's Commercial Banks Credit The Systemic Risk Studies

Commercial banks in china lack enough channels of funds operating. Credit business is the main business of commercial banks in china. So credit risk is the main risk facing the commercial banks. If we don't pay attention to the credit risk, it will affect the stability of our country's financial system and hinder continued economic growth. Regarding the credit risk of commercial banks, people pay more attention to the non-systemic risks which are related to the borrower's financial situation and repayment will. The systemic risks which are related to macro-economic changes are unnoticed. Our corporate finance usually relies on commercial banks. Bank loans in our country are concentrated and pro-cyclical. So the credit risks of commercial banks in china are sensitive to macroeconomic fluctuations. It then generates systemic credit risks. Commercial banks in china should pay more attention to the systemic risks of credit assets in risk management. In this paper, we will analyze the reasons why commercial banks in china are sensitive to systemic credit risks. Then study the factors which may trigger the systemic credit risks. Also we will divided the factors into two categories which are general factors and our special factors.This paper is divided into six parts. In introduction and chapter two, we will overview the related literatures and present the definition of systemic credit risks. Characteristics and harm of systemic credit risks also will be introduced in these parts. In chapter three, we will analyze the reasons why there are systemic credit risks in our commercial banks from two aspects. In chapter four, we will study the macroeconomic factors which may trigger systemic credit risks. And these factors will be divided into general factors and special factors. In chapter five, we will use cointegration test to prove the existence of systemic credit risks in china. Then multiple regression models are established to study the effects of the macroeconomic factors. In general factors, we found that changes in economic trend, purchasing power of money and monetary policy can trigger systemic credit risks. And the effects of changes in monetary policy is greater in the short term. Tightening of monetary policy can increase systemic credit risks. Fiscal policy does not influence the systemic credit risks. In special factors, we found that both credit expansion and changes in real estate market have significant impact on systemic credit risks. Changes in stock market do not influence the systemic credit risks. Changes in industrial policy also can affect systemic credit risks. In chapter six, we discuss the measures of prevention of systemic credit risks. The measures can be divided into four aspects which are the adjustment of bank credit behavior, optimizing the structure of corporate finance, preventing the credit risks in real estate industry and keeping the continuity and stability of monetary policy.