Abstract
Finance is becoming more important in the national economy. Maintaining financial stability is critical not only for the financial industry’s prosperity and development, but also for a country’s political, economic, and social development. This paper will look at the mechanisms that cause systemic risk to develop and evolve, as well as how to measure systemic financial risk in multiple dimensions. To begin, create a system for evaluating financial risk in a systematic manner. Second, using the AHP and CRITIC methods to determine various indicators and market weights, create a systemic financial risk evaluation model based on the system dynamics model, and calculate the system from 2010 to 2019 comprehensive financial risk index. Finally, simulation research is conducted using the system dynamics model of systemic financial risk, and the simulation results are analyzed. The findings show that China’s financial risk has been gradually increasing since 2016, with relatively small fluctuations in risk state.
Highlights
Systemic financial risks occur in financial markets, and affect macroeconomic and social wealth, according to international social practice [1]
A good macroeconomic environment is required for the effective operation of the financial markets. e financial market’s effectiveness will be hampered as the macroeconomic operating environment deteriorates, resulting in unsustainable financial market stability and the emergence of systemic financial risks. e quality of a country’s macroeconomic environment is influenced by the overall economic operation. e overall economic operation risk refers to the possibility that the economic operation deviates significantly from the equilibrium state
The degree of realization of macroeconomic development goals is often used to measure the overall economic operation risk. erefore, the adjustment of industrial structure leads to the slowdown of economic growth, the difficulties of non-state-owned enterprises lead to the deterioration of employment environment, the internationalization of RMB aggravates the imbalance of international payments, and the inflation caused by high leverage will all have negative effects on the stability of financial order
Summary
Systemic financial risks occur in financial markets, and affect macroeconomic and social wealth, according to international social practice [1]. Without a doubt, benefit China’s financial industry. It has the potential to introduce more efficient and diverse funds, introduce international advanced management concepts and innovative thinking, and revitalize China’s financial system. There are no benefits on either end, and financial globalization has numerous drawbacks [2, 3]. It may increase a country’s economy’s risk exposure and the financial system’s vulnerability to external pressure, raising the possibility of systemic financial risks. It has the potential to boost economic growth while increasing the likelihood and severity of systemic financial risks escalating into financial crises. Systemic financial risk research is important at this stage
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