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Intergration of Bank’s Market and Credit Risk Based on Copula

Author: XieLiLi
Tutor: ZuoHaiFeng
School: Nanjing University of Finance and Economics
Course: Finance
Keywords: Comprehensive risk management Market risk Credit Risk Copula function VaR
CLC: F832.2
Type: Master's thesis
Year: 2010
Downloads: 230
Quote: 0
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Abstract


With the continuous development of the financial globalization and financial innovation , the risk of commercial banks showing a change in the trend to diversify from a single commercial bank risk management is moving to a comprehensive risk management . The main risks faced by commercial banks at this stage is a credit risk , credit risk and operational risk , the relationship of mutual influence between various risks , it is very necessary to study how to measure the overall level of risk of commercial banks . Firstly, by choosing the SSE Government Bond Index yield the dollars intermediate exchange rate yield and HS300 index gains rate the impact of market risk factors , select SSE Government Bond Index yield and Shanghai corporate bond yields for credit risk factors , and in turn the OLS regression , the estimated daily risk yield estimate to determine the distribution of individual risk-benefit accordingly , and then use the Copula function and variance - covariance method to integrate the market risk and credit risk of commercial banks to calculate credit risk and market the integration of risk VaR value . Finally, return to the test method , the pros and cons of the two methods . Select panel data of China 's 12 listed banks by the model , the empirical research , the study results show that , in the Copula model is superior to the traditional risk measure aspects of the variance - covariance model .

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CLC: > Economic > Fiscal, monetary > Finance, banking > China's financial,banking > Banking system and business
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