The Impact On Banks Income And Operation Risk Of Noninterest Income In The Chinese Banks And The U.S. Banks

In recent years, with the advance of globalization and financial liberalization, the commercial bank traditional income structure is challenged, the development of non--interest income business becomes the choice of commercial banks. Profitability and security are the basic criterion of bank prudent operation. The commercial banks expanding to non-interest income business will have an impact on the income and risks of commercial banks. So this paper focus on the impact on banks income and operation risk of noninterest income.Firstly, we sort the relevant research literature of domestic and foreign scholars on the impact of non-interest income of banks income and risks. Then we categorize the source and type of non-interest income of commercial banks, and analyze the non-interest income characteristics and specific risks. On the basis, we review the development of commercial banks’ non-interest income in China and the United States We establish an empirical model in order to study the impact of banks income and risks of non-interest income.The basic conclusion of this paper is that non-interest income of commercial banks in China and the United States have different impacts on the revenue and risks. The increase in non-interest income will increase the operating income of commercial banks both Chinese commercial banks and the U.S. commercial banks. However an increase in non-interest income would increase the risk of Chinese commercial banks and an increase in noninterest income will significantly reduce the risk of U.S. commercial banks. On the basis of empirical research, we propose the following recommendations. Firstly, we should fully and correctly understand the importance and necessity of the development of noninterest income business and promote the innovation of the noninterest income business. Secondly, it is important to establish a comprehensive risk management system for the development of banks. Lastly, improving laws and regulations and cultivating a good environment for the development of noninterest income business are important.