The Effect Of Non-interest Income On Risk Of Listed Commercial Banks In China

Nowadays, as the economic system reform deepens, the development of the banking sector has increasingly become the focus of attention. Especially in recent years, China has gradually liberalized restrictions on the entry of foreign bank and private capital, the increasingly fierce competition between traditional business, reform of the substantial interest rate market and financial "disintermediation" Phenomenon jointly promote the proportion of non-interest income, non-interest business expansion is becoming a new driving force for banks to maintain rapid growth. However, whether non-interest income improves effectiveness at the same time can change the risk profile of the bank remains to be verified.Starting from the non-interest business of commercial banks, this paper first introduces the research of relevant literature, and non-interest income related concepts, development background and necessity, then analyzes the current situation of China’s listed commercial banks non-interest business. In empirical part, the paper first expound the theoretical basis and risk transmission mechanism between non-interest business and risks, then establish regression models based on this theory, use the panel data between first quarter of2007to the third quarter of2013of the16listed commercial banks, in order to examine the relationship between non-interest income and bank risk.Concluded that:(1)there is a negative correlation between the proportion of fee and commission income and bank risk, that increasing proportion of fee and commission income will lead to a decrease in bank risk;(2) there was a positive correlation between the risk and proportion of investment income;(3) other non-interest income, including changes in fair value gains and losses, foreign exchange gains and losses, other operating income, owns an insignificant relationship with the risk, but the coefficient shows that increased proportion of this income will reduce bank risk;(4) non-interest income of the bank which reduces the risk function exactly constitutes intermediate business operations, commercial banks should develop intermediary business.Finally, the article analyzes and China’s actual situation, proposes strategies of the development of non-interest-related business, in order to learn from them and play a role in promoting non-interest business both from the theoretical and empirical.