Correlation Analysis Between The Financial Soundness Of Banks And Businesses

Commercial banks and business enterprises in the market economy are twodifferent operating systems,speaking from the financialmanagement,commercial banks and business enterprises operate asindependent entities in market economy subjecting to the financialprinciples such as profit maximization, shareholder wealth maximization,corporate value maximization and capital’s appreciation sustainable andeffective.As China’s capital market are incomplete、stunted growth andstarted late, enterprises’ direct financing through the stock and bondmarkets accounts for a relatively small scale.Bank loans in corporatefinance are in an absolute weight,therefore, between bank loans and othersources of loanable funds does not exist the complete replacement,certain borrowers to get the necessary funds can only borrow through abank.Banking book assets between long and short term is often reflectedin short and long term liabilities of enterprises,the company’s moneyfunds are also the bank’s liabilities,the financial structure of the twoshould exist a certain correlation,indicators of financial health ofenterprises will have a certain impact on banks.Since2008, the financialcrisis have a greater impact on both commercial banks and businessenterprises.The financial soundness determine banks and enterprises ifthey can withstand economic fluctuations,achieve solid operating andsecurity through economic fluctuations.View of this article based on the listed companies though the empiricaldata analysis,Bank and corporate asset-liability ratio is the twoindicators of long-term solvenc，and current ratio of asset is the twoindicators of short-term solvenc.Select the bank’s financial stability’srelated indicators as the explained variable and enterprises financialsoundness indicators as the core explanatory variables,and select therepresentatives of the monetary policy interest rate as the other controlvariables,and use Regression Modelto verify the financial soundnessindicators of business and the interest rate’s effect on financialindicators of banking-related.Explore China’s monetary policy’s effecton both industrial and commercial enterprises and commercial banks’sfinancial soundness and its regularity.This article is empirical study and obtaines the following conclusions:（1）From the bank and the industry businesses’s analysis of financialsoundness indicators,there is not reached a significant correlationbetween the two.But there is a regularity for the interest rate impacton the bank and the industry businesses:When interest rate ondeparture,bank balance sheet has been optimized,but the whole corporatedebt rate increases,on the contrary the opposite.(2)From the bank and sub-sectors financial soundness indicators exist a certain correlation,such as:Banks and food industry’s asset-liabilityratio is positively correlated showing that banking structure on the foodindustry has a positive conduction.So when interest rates rise,foodindustry asset-liability ratio has a decline,and it optimizes thefinancial statements.On the other hand,food processing industry does nothave an obvious fluctuation to the economy cycle and even Even showes somecounter-cyclical.So when macro-economic downwards and the monetarypolicy tightening,food processing industry can run as a commercial bank’swell put credit industry.For example,banks and chemical fiber industryhave a significant negative correlation on the last stage’sasset-liability ratio showing the bank asset-liability ratio lags thechemical fiber industry,and they have an opposite conduction.On the otherhand,chemical fiber industry have an obvious fluctuation to the economycycle.So when the monetary policy tightening that the interest rate onthe row,it has an negative impact on asset-liability ratio of the chemicalfiber industry which should arouse the concern of the banking sector.