A study on Evaluating and managing the financial risks of local banks in Henan Province based on Analytic Hierarchy Process Model

Abstract

Henan is a populous province in China, and its banking system is sound. The development of local banks plays an significant role in economic development of Henan Province. For these factors, some suggestions are presented, such as increasing capital accumulation rate reasonably, improving the management of credit risk, realizing the diversification of profits and controlling cost-income ratio effectively. 1 Background Economic globalization promoted the rapid development of Finance since 1990s.A variety of (Various) financial products were introduced in 2013, and government significantly introduced various financial reform policies[1][2]. On February 28, 2015, the central bank announced that the deposit and loan interest rates would decreased by 0.25% form March 1st 2015, and China's financial reform process continued to accelerate. Every economic agents' need for financial system was enhanced under the market economic system, and local banks having crisis would cause a certain impact on China's economy[3][4]. Evaluating the financial risks of local banks, finding out the important factors which influenced them in Henan Province could be effectively control the financial risks[5].