Comparative Study on the Relative Risk of Commercial Banks: Empirical Evidence of 14 Commercial Banks from 2001 to 2004

In order to seek out the bottlenecks in the whole Chinese banking running process, this paper, based on the risk evaluation index system (REIS) and on the risk comparison model (RCM), compared and analyzed the risk comparison of 14 Chinese banks. In accordance with the risk level, these 14 banks could be measured off into 3 categories: the first category, consisted of Huaxia Bank China Merchants Bank Minsheng Bank, and Bank of China, has the highest level of safety; while the third category, consisted of the Agriculture Bank of China, ICBC, and Guangdong Development Bank is the bottleneck of China´s banking system. Thus, the main reasons as nonperforming loans, incapability of profitability, and the illiquidity ratio of assets, which cause the risky situation of the commercial banks, are also the key points to the banking reform of whole safety.