Research On The Fragility Problems Of The China's State-Owned Commercial Banks

The banking system is the core of the modern financial system, the fragility of Chinese banking industry is innate, The 2009 financial crisis has highlighted the issue of banking fragility,after the crisis,China carries out proactive fiscal policy and moderately loose monetary policy. Increasing the loan growth,bringing excess liquidity and asset bubles. It aggravated the fragility of Chinese banking industry. The steady operation of Chines banking industry will face more severe challenges. In this background, this paper chooses the fragility of the banking syestem as the object,to find the causes of the fragility of the banking system and provide practical policy recommendations to pursuit the stability of the banking system.This paper first introduces the fragility of the banking system,including the definition,basic theory, then it introduces the performance of our banking system's fragility,and with quantitative method the level of fragility of China's state-owned banks is measured.It introduces the origin of China's state-owned banks's fragility,it has also collected samples data of 1985-2010,using unit root test,Granger causality test, cointegration test,to do empirical analysis on the real causes of the bank's fragility. Empirical results show that causal relationship exists between some macro-economic indicators,financial indicators and the fragility of state-owned commercial banks, while the financial indicators have higher impact than macroeconomic indicators. On the basis of the above, it provides governance and prevention policy recommendations from the following aspects:strengthen liquidity management, steady progress in the implementation of BaselⅢ, strengthen financial supervision,push reform of property right system.It has historical and Practical significances in carrying out theories discussion,statistics and anlysis and specific suggestions to our country commercial bank system fragility.