Title: A survey of systemic risk in the banking industry

Authors: Can Zhao; Dejun Xie; Zhiyong Chen

Addresses: Xi'an Jiaotong Liverpool University, 111 Renai Road, Suzhou, China ' Xi'an Jiaotong Liverpool University, 111 Renai Road, Suzhou, China ' Renmin University of China, 59 Zhongguancun Avenue, Beijing, China

Abstract: The paper surveys the systemic risks in the banking industry, characterising the risks according to the risk source and market transmission mechanism. The corresponding approaches that could be leveraged by regulations to minimise such risks are meticulously analysed. Diverse isolated sources of systemic risk could be managed using differential measurements for separate sources using various data-based financial ratios and regulation tools. More sophisticated approach is the integration of various global measures, which are aimed at regulating systemic risk without specific sources, and it uses market data to operate a more efficient regulation. In this paper, detailed comparisons in terms of the advantages and disadvantages of these regulation tools and measures are discussed and suggestions for more robust future regulation are also provided.

Keywords: systemic risk; risk transmission; regulation tools; financial ratios; integrated measures.

DOI: 10.1504/IJEF.2024.135174

International Journal of Electronic Finance, 2024 Vol.13 No.1, pp.103 - 120

Accepted: 04 Feb 2023
Published online: 01 Dec 2023 *

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