The Empirical Analysis about the Relationship between the Financial Openness and Commercial Bank Risk in China

In this article, first of all, we have measured the degree of China´s financial openness and commercial bank risk, and on the basis of data, we have analyzed the relationship between financial openness and commercial bank risk from the model of unit root test, co-integration test, error correction model, Granger causality test and impulse response function. We find there exists co-integration relationship between the Bank Risk (lnBR) and the Financial Openness (lnFO). Through Granger causality test, it proves financial openness is cause, bank risk is result, and financial openness will lead to the increase of bank risk. And from impulse response function, we find there is a time lag in increasing bank risk that was brought about by increasing the degree of financial openness.