According to the primary and secondary business of commercial banks, the operating income of commercial banks can be divided into main business income and other business income. Generally speaking, the main business income accounts for a large proportion of the operating income of commercial banks, which will have a greater impact on the economic benefits of commercial banks.
The operating income obtained by commercial banks from providing financial goods or services mainly includes interest income, fees and commission income, other business income, exchange gains and losses, fair value change gains and losses, investment income, etc.
Since 1990s, the world financial industry has been in a turbulent situation. In the past 15 years, banking crises occurred frequently all over the world. The banking crisis is often caused by the payment difficulties of commercial banks, that is, the lack of liquidity of assets, rather than insolvency.
As long as banks can maintain sufficient liquidity, they may maintain their existence and operation in the state of insolvency, technical bankruptcy but not bankruptcy.
The banking crisis has produced a domino effect. Because asset allocation is the main business of commercial banks and other financial institutions, there are complex creditor-debtor relationships among financial institutions due to asset allocation, which makes asset allocation risk highly contagious.
Once the assets of financial institutions are improperly allocated and the normal liquidity cannot be guaranteed, individual or local financial difficulties will turn into global financial turmoil.
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