The Crisis-withstanding Ability of the Chinese Banks

Abstract

Since the financial crisis, which started in 2007, research into the failure of banks and even that very possibility has found a wide audience of regulators, journalists and readers. With considerable interest, researchers have delved into the available data to measure the fragility of banking systems around the world. The same exercise would also be useful for China.¹ Furthermore, researchers have argued that the vulnerability of the banking system is high following financial liberalisation — something that is now happening in China (Demirgüc-Kunt and Detragiache, 1998).