金融产品创新对中国商业银行风险影响的实证分析-empirical analysis of the impact of financial product innovation on the risk of chinese commercial banks.docxVIP

AbstractThe wave of financial product innovation has swept across China since the 21st century. The business pattern of domestic commercial banks has changed from the traditional pattern to the modern pattern which includes assets, liabilities, and external business. Many commercial banks launches kinds of innovation products to be more competitive in the market.Financial innovation has two sides. It has the function to prevent risk and also has the probability to create new risk. Even though most commercial banks have built a vast and complex risk control system, but the new risks come from innovation need new risk-management techniques just like the new network virus needs more advanced technology to control. When we introduce the technology of how to create new financial product, do we also introduce the technology of how to control the new risk related to the new product? So far none of us knows.In the theoretical part, the paper defines the concept of financial product innovation from the theory and practice. In the same time, with the help of the beta of CAPM model, the paper measures the investment risk of commercial bank and uses it to measure the banks overall risk. Then, the paper analyses the cause of the risk created by product innovation basing on the theories of principle-agent, financial intermediation theory and so on. In the same time, I try to expound the hypothesis of the paper: financial product innovation of commercial banks increased the overall risk of the bank.In the empirical part, the paper choose the “degree of product innovation in intermediate business” and “degree of financial product innovation” as the indicator of bank’s financial products innovation, and a panel data of the sample from 2007 to 2011 is used to do a regression analysis. The regression results verify the theoretic conclusion consistently: there is a significant positive correlation between the degree of commercialbank’s financial products innovation and the banks risk.