The Fragility Of China's Banking And Its Market-oriented Reform

Banking is characterized by fragility. But the fragility of China's banking under the background of gradual transition is quite different from those of the developed countries and other developing countries. The dissertation makes a comprehensive studies of the features of China's banking fragility, the mechanism for its emergence and the efficient governance on the basis of reviewing and summarizing the major points of the literatures concerning the fragility of banking.Firstly, the dissertation reviews and sum up the major viewpoints of the literatures concerning the fragility of banking from the macro and micro perspectives. It focuses on the classical and creative theories of those representative economists in these fields. And then the dissertation investigates the features of the fragility of China's banking. A series of empirical evidences show that China's banking is in severe fragility. We also roughly calculate the external costs of the fragility of China's banking. Besides, we use the indicators of insolvency risk to analyze the risk situation of Chinese banks and probe into the key factors which influence the insolvency risks of Chinese banks. Later on , we make analysis of the mechanism for the emergence of the fragility. Market-oriented reform is the efficient method to deal with the fragility of Chinese banking.In the last part of the dissertation, we massively discuss some important issues of the market-oriented reform of Chinese banking system, such as property rights reform, supplementary for capital, interest rate market-oriented reform and banks share-holding company etc.The innovative ideas of the dissertation mainly lie in: the comprehensive review and the introduction with focus of the academic literatures concerning the fragility of Chinese banking. Through the empirical study, we found that China's banking is in severe fragility and the external costs resulted from the fragility is high. We are the first to use indicators of insolvency risk to analyze the risk situation of Chinese Banks and based on the empirical evidences we found that the key factors which influence the insolvency risks of banks are the sufficiency of capital assets, the quality of assets, the mobility of assets and the scales of the bank. We hold the view that government's financial control is the major institutional background and soils for the emergence of the fragility of China's banking system. The lag-back market-oriented reform is the major cause for the fragility of China's banking. As there is no direct correlation between banks' property rights and banks' performances, we should take a rational attitude towards the state-owned' banks listed on the stock market. It is an efficient method to issue long-term secondary supplementary banks capital to crack the hard nut of the capital asset of Chinese commercial banks. Meanwhile, we hold the view that banks' holding company is the better organization form after the state-owned banks are listed on the stock market.