Economic Transformation Of Rural Financial Risk

Rural finance in China has made rapid progress since 1979 and contributed enormously to the rural reform and development and the growth of national economy. But the risks accumulated in the rural finance begin emerging in recent years. The Agricultural Bank of China (ABC) plays the part of the main body of Chinese rural finance system and its risks are more prominent. It is the logical requirement of stable development of rural finance to prevent and eliminate effectively the risks. Guided by Marxism theory of commodity economy and bank and credit, based on the predecessors' research, the present writer applies foreign risk management theory of commercial bank, modern property right theory and information theory to study deeply the display, basic features and specific causes of ABC risks and the reconstruction of ABC risk management, and advances original views.Domestic research into commercial bank risks started at the end of 1980's, but foreign research has become mature. From the theory of asset risk management, the theory of liability risk management in 1960's, the theory of asset-liability risk management in 1970's, the theory of off-balance-sheet risk management, financial engineering to the system of Basle, the theory of risk management of commercial bank .which is an important part of the theory of risk management has developed into an integrated system in the recent more than two centuries. At the same time, the research of risk and uncertainty management has made great contribution to modern economics.The dissertation holds that modern market economy is risk economy proved in aspects of market transaction and division, efficiency of resources distribution, flow and transfer of property right, limited reason and opportunism tendency of the behavior of economic subject and economic environment. Commercial bank risk is the opportunity and possibility of suffering economic lose and obtaining extra earnings from the impact of all kinds of uncertainty factors that lead to the difference between the actual earning and the expected earning. The "risk" here is different from "lose" and the "risk" in the insurance business. Risk in the insurance is always the another name of lose, but risk in the economics is a dynamic action and the way that produce two different impacts to economic subjects. Therefore, risk is a kind of mechanism, not a simple economic phenomenon. In another words, commercial bank could seek the best combination of rate and quality of development because of the mechanism of suffering lose and obtaining earning by risks.The fragility and crises of bank has become a global economic problem. 130 countries and regions, have suffered serious bank problems since 1980. Developing countries, industrialized market economy countries and all economy-transferring countries have suffered the influence. In the financial crises of South-Eastem Asia in 1997, bad bank system played the role of chief culpnt and became the major cause. The crises attacked China and did not produce crushing blow mainly because of system reform and economic growth in the recent 20 years in China. But in thetransferring from the planned economy to the socialist market economy, the threat of bank risks in China has not disappeared. In recent years, some kinds of nsks in Chinese banking begin appearing. One of the prominent display is the excessive concentration and the risks of state-owned bank(SOB) are showed by the excessive proportion of non-performing loans. By Ihe end of 199', the total amount of idle loans and bad loans outnumbers SOB capital. Theoretically. SOB have operated under the situation of minus net asset, technical bankruptcy but actually not bankruptcy. SOBs keeping operation and the public confidence, one reason is that the public have not had the full understanding of the seriousness of SOB non-performing loans due to non-complete information , another one is lhat the public have faith in SOBs and believe that Chinese government will not let SOBs go bankruptcy. Otherwise, SOBs have already closed do...