Analysis Of The Risk Diversification Effect Of Non-interest Business Of Commercial Banks

Entered in twenty-first Century,along with our country to accelerate economic reform,foreign banks have entered China's financial market,the domestic interest rate marketization process of deepening,domestic customer demand for investment diversification and internationalization and the rapid development of the Internet Finance and city commercial banks in recent years,domestic commercial banks to make difficult to continue the traditional deposit and loan spreads as the main source of profits of profit model.In order to get rid of this situation,commercial banks began to develop non-interest business,make it become the new driving force for bank profits.However,China's commercial banks are not paying enough attention to the risk management of non-interest business,whether the continuous improvement of non-interest income can improve the risk of commercial banks,whether it will reduce the overall risk level of commercial banks so far.The global economic risk triggered by the US subprime mortgage crisis in 2008 also suggests that lack of effective oversight of non-interest business risks can pose a significant risk to the economy.Therefore,this paper chooses16 listed commercial banks in 2005—2015 to analyze the scattered effect of non-interest income on bank risk.In this paper,we choose the non-interest income rate of change,the rate of change of interest income and the change rate of bank revenue as the research object.First,the volatility of the three analysis,found that interest income,non-interest income or operating income,its fluctuations in 2006-2010 are higher than the 2011-2015 fluctuations.And then through the combination of portfolio theory on the variance of the bank's turnover rate of decomposition,it is concluded that the decline of the fluctuation of operating income of listed banks in China mainly comes from the decrease of interest income,non-interest income volatility and the covariance of the two.The decline is basically the same.Also indicating that China's listed banks through the development of non-interest income business will bring risk diversification effect.And then classified 16 listed commercial banks,mainly divided into state-controlled banks,the national joint-stock banks and urban commercial banks,through comparative analysis,we can see that with the increase in non-interest income and interest income volatility is gettingsmaller and smaller,Non-interest income fluctuations will gradually replace the interest income fluctuations as an important source of commercial bank operating income fluctuations.Finally,the analysis of non-interest income and interest income to determine the non-interest income changes on the risk of commercial banks played a decentralized role.The results show that the existence of the risk diversification effect of non-interest income,and also found by comparison of three types of banks,with the non-interest income accounted for the proportion of revenues increased,before reaching a certain range,with the proportion of non-interest income increases,the marginal effect of decentralization to the gradually increased.When the non-interest income accounted for the proportion of revenues exceed a certain range,with the proportion of non-interest income increases,the marginal effect of diversification brought in gradually weakened.