The Research Of The Commercial Bank Capital Stability Based On The Complex Network

With the continuous development of the world's economy and finance,the stability of the economy cycle,especially the stability of the financial system,has increasingly become the key point of the sustained and stable development of the current society.In the entire financial system,the commercial banking system is becoming an integral part of the whole system,because of the role and the size of it.In the banking system,liquidity stability and security depends not only on each participating bank's own characteristics and operations of the financi al situation,but also on the entire banking system and its own structure in the economic and financial environment.Thus,the responsibility of the banking supervision department is to use a series of regulatory policies and instruments,to the identify and isolate the banking system which is in an existing or potential risk,in order to ensure the stability of the entire banking system,which is not affected by a single bank or a handful of banks' breach of bankruptcy.In the banking system,when a bank cannot pay its debt,it namely occurs the phenomenon of default.When a bank has a large amount of capital,its ability to respond to large-scale pay-off seems relatively strong,that means it has low risk of default.Conversely,if a bank's capital level is low,its capacity to respond to large-scale pay-off seems relatively poor and it has a higher risk of default.When a bank's capital is not sufficient to pay the external debt,that is insolvent,and probably go into bankruptcy.In order to prevent the bankruptcy,and ensure stability of the banking system and financial system,banking regulators will usually take a series of measures to regulate the capital of the banks.The purpose of regulation is to enable banks to maintain sufficient capital,and do not appear insolvent situation.In the case of a number of banks appear insolvent in the banking system,the banking system appears systemic risk,which directly leads to the financial crisis.In this paper,we use the tools of complex networks to explore the linkage between the capital adequacy ratio of commercial bank and its interbank business.By collating and summarizing the status of domestic and international academic research on complex networks and commercial bank capital and capital adequacy ratio,we elaborate the theory of complex networks and capital adequacy ratios of commercial banks.By introducing the development of Basel Accords,we build a weighted commercial Bank network based on the stability of the commercial bank capital.We set threshold which based on the bank's own characteristics and the topology of the banking network.The threshold refers to the minimum capital level of the commercial bank.Finally,we start our analysis and evaluation from the three levels of network: Firstly,we analyze the statistical parameters of each node in the network,to identify Hub nodes of the network,and locate the key risks from the micro level;Secondly,we analyze the local area network where the Hub nodes located,to identify the threshold range that triggers the appearance of the risk,and simulate the dynamic transmission of the risk from meson-level;Thirdly,we analyze topology and characteristics of the entire network and network to identify propagation path of theanalog risk across the network,and put forward relevant risk prevention measures and liquidity assistance strategy from macro level.