Risk Contagion Analysis of Listed Banks in China Based on Nonlinear Correlation Network

This paper examines the contagion of interbank risks. We construct the correlation network among China's listed banks using a nonlinear measurement method, and build the threshold network and minimum spanning tree (MST) from the nonlinear correlations based on relevant data. We study the structural characteristics of the association network and analyze the risk-transmission path and dynamic changes. The empirical evidence indicates that China's listed banks exhibit a small-world structure, and the degree of contact between banks and banks is strengthened in the event of a crisis. China Minsheng Bank, Bank of Communications, Bank of Beijing and Bank of Guiyang are systemically important banks, with Bank of Guiyang deserving attention. This study shows that in financial supervision, it is necessary to strengthen the monitoring of the potential path and evolution process of bank risk transmission, and prevent and control in advance to prevent the occurrence of systemic risks.