The Analysis on Vulnerability of Chinese Bank System and the Countermeasures

Financial vulnerability in China is mainly those in its financial system. Many lessons have shown that bank crises are usually the core factors of modern financial crises. Therefore, we must carefully analyze the vulnerability of Chinese bank system to ensure the financial stability. The paper recognizes that the vulnerability of Chinese bank system is mainly reflected by six aspects, which are weak mechanism of internal control, institutional dependence between state-owned enterprises and state-owned commercial banks, high non-performing loan ratio, unreasonable bank structure, rise of real estate industry highly concentrated in the banking and no insurance system of explicit deposit. The paper also sets he countermeasures to resolve the vulnerability of Chinese bank system.