The Research On The Influence Of China's High Leverage On Systematic Financial Risk

The financial industry has increasingly become an indispensable basic industry in social life.However,the rising debts under the rapid expansion of scale will easily lead to systemic financial risks and lead to financial and economic crises.After the 1980 s,the easing cycle of financial regulation came,and financial leverage was getting higher and higher.As the largest developing country in the world,the internal and external environment of China's economic development is very complicated.Under the background of rapid economic development since the reform and opening up,the foundation of financial development dependence is not enough.It is easy to lead to systemic financial risks when it is slightly inadvertent.Therefor e,it measures the leverage ratio and systemic financial risk,and studies the increase of leverage ratio in China.Systemic financial risk has become an important and urgent issue.Through empirical exploration of the relationship between leverage ratio a nd systemic financial risk,it is beneficial to monitor China's financial risk level and curb systemic financial risks through policy adjustment.Based on relevant research,this paper sorts out and reviews the changes in the respective leverage ratios of the five stages of China's macro leverage ratio in the past 20 years.By studying the mechanism of high leverage to form a systemic financial risk,we explain how the leverage ratio is transmitted in five directions to form a systemic financial risk.On this basis,a systematic financial risk indicator system is established based on the current research on systemic financial risks,and the actual data is used to calculate the index.The empirical results show that systemic financial risks mainly come from the real estate market,government and real economy development.Then,the systemic financial risk is taken as the explanatory variable,and the leverage ratio is used as the explanatory variable.The regression model is established to analyze the impact of China's leverage ratio on systemic financial risk.The results show that the increase in systemic financial risk will lead to an increase in leverage.In the larger confidence interval,the increase in leverage will also lead to an increase in systemic financial risk.Finally,some policy recommendations to prevent high leverage and increase systemic financial risks are proposed.