MULTIDIMENSIONAL PERSPECTIVE OF FINANCIAL RISK ANALYSIS: EVIDENCE FROM CHINA

Yunxia Tan (), Hafeez Ullah, Xiaoyue Cheng (), Fan Zhang () and Zhuquan Wang
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Yunxia Tan: Evergrowing Bank Co., Ltd., 250014 Jinan, P. R. China
Hafeez Ullah: �Antai College of Economics and Management, Shanghai Jiaotong University, 200000 Shanghai, P. R. China
Xiaoyue Cheng: ��College of Management, Ocean University of China, 266100 Qingdao, P. R. China
Fan Zhang: �College of Accounting, Henan University of Economics and Law, 45000, Zhengzhou, P. R. China
Zhuquan Wang: ��College of Management, Ocean University of China, 266100 Qingdao, P. R. China‡China Business Working Capital Management Research Center, 266100 Qingdao, P. R. China

The Singapore Economic Review (SER), 2023, vol. 68, issue 03, 841-866

Abstract: China faces a critical economic structural transformation with increasing financial instability and uncertainty, necessitating a greater need for accurate measurement of systemic financial risk. In the paper, this work analyses the systemic financial risk in China between 2011 and 2020 based on financial development, fragility and risk indicators and the world economy to construct a comprehensive index of systemic financial risk (CISFR). The results show an upward trend in China’s financial risk in the past 10 years and a mid-to-high level fluctuation in the past five years, mainly driven by risks in the banking system, securities market and real estate market. In 2021–2022, China’s financial system is still in a high-risk stage, and high systemic risks are still an important economic issue. The study’s comprehensive index method can be extended to emerging economies. It reflects the main driving factors of financial risk by assigning weights to basic indicators from a multidimensional perspective, thus providing a reference for policymakers to prevent and control financial risk.

Keywords: Financial risk analysis; comprehensive index; quantitative measurement; innovative financial development; applications (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:wsi:serxxx:v:68:y:2023:i:03:n:s0217590822500680

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DOI: 10.1142/S0217590822500680

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