Abstract: When preventing and managing financial risks, it is essential to control the fragility of the banking system. Use principal component analysis to fit the vulnerability index of the banking system, analyze and monitor the vulnerability of my country’s banking system from January 2004 to September 2013, and use the GED-GARCH family model to analyze the vulnerability of my country’s banking system. Inertial characteristics are empirically tested. The research results show that: First, the vulnerability of the banking system and its volatility are greatly affected by the previous level, showing strong time-dependent characteristics; second, the estimation results of the GEDGARCH-M model show that the vulnerability of my country's banking system is not significant. Thirdly, the estimation results of the TGARCH and EGARCH models show that the volatility level of the banking system’s vulnerability to different information reflects an obvious asymmetric effect; finally, the estimation results of the GARCH family model all show that the current use of Monetary policy to adjust the growth rate of broad money supply is an effective means of regulating the vulnerability of the banking system.

Key words:Banking system fragility; time dependence; volatility dependence; GED-GARCH model;