Research On The Impact Of Financial Leverage On Systemic Financial Risk In China's Non-financial Sector

Since 2008,in order to ease the huge pressure brought by the global financial crisis,China has implemented a series of economic stimulus.Although it has achieved success in the short term,debt has also increased at a faster rate.The level of financial leverage of various non-financial sectors in China has risen to varying degrees,deviating from its original long-term stable growth trajectory.Meanwhile,China's economy entering a new normal state,the return on invested capital began to decline in recent years.If the problem of financial leverage can not be solved or alleviated,once the event of insolvency occurs,it will trigger systemic financial risks.This research firstly summarized the existing literatures about the measurement of financial leverage,the definition and measurement of systemic financial risks and the impact of financial leverage on systemic financial risks.Then,based on he theory of financial vulnerability and the theory of financial economic cycle,this paper analyzes the mechanism of the influence of the change in the financial leverage of non-financial enterprises,residents and governments on systemic financial risk,It explains theoretically the influence of financial leverage on systemic financial risk.Then stand the level of financial leverage and the fluctuation of financial leverage these two perspective,this research describe the current situation of financial leverage in various non-financial sectors in China,and find out the existing problems of China's financial leverage.The empirical part is divided into two parts:one is to select 10 indexes from markets of bank,securities,insurance and foreign exchange,and finally make use of the ratio of variance to determine the weight and build the financial pressure index to reflect the systemic financial risk in China.The other part uses the VAR model to verify the impact direction and impact of the financial leverage level and financial leverage fluctuation on the financial pressure index,through the horizontal and vertical comparison,to find out the departments and variables that have greater impact on the systemic financial risk.Finally,according to the conclusions,we put forward policy recommendations for de-leveraging.The research conclusion is:China's level of financial leverage is growing too fast and mainly concentrated in the state owned enterprises and local government departments;The financial leverage of all non-financial sectors have a positive impact on the financial pressure index,and the impact of the fluctuation of financial leverage on the financial pressure index is greater than that of financial leverage on the financial pressure index;The impact strength of the financial leverage of various non-financial sectors on the financial pressure index from top to bottom non-financial enterprise,government department,resident.Based on the actual situation of China,this paper puts forward the corresponding policy recommendations for de-leveraging from two perspectives:macro level and micro level.