Study Of China's Banking Business Performance Evaluation And Incentive Constraints

Throughout the course of economic development, bank, through its credit intermediary, payment intermediary, credit creation and other financial service functions, continuously optimizes the allocation of capital and resources, improves economic operation efficiency, and promotes sustainable economic growth. Bank efficiency is a key factor in deciding bank's existence and development, as well as its function's normal exertion. Bank operation efficiency means, given the fact that bank can effectively ensure its profitability, safety and liquidity, bank has reasonable configuration for its resources and can promote farthest the flow of social and economic resources, and it is floorboard of bank's market competitiveness, input-output ability and capacity of sustainable development. The evaluation of banking system should be based on such criteria as stability, efficiency and fairness. One important characteristics of a good banking system is to provide quality services at competitive price, and continuously improve bank's competitiveness and vitality. Therefore, improving operation efficiency of banking system is one of the important contents of bank evaluation. Combined with the actual conditions of our country, the realization of banking system evaluation target is the joint action result of regulators, regulated parties and transmission mechanism, and is a process of constant rectification and gradual approximation. On the other hand, although banking supervision can partially correct the birth defects of commercial banks'internal control mechanism, the intervention may also bring about some new problems, affecting the normal operation efficiency of bank management mechanism. Therefore, the way of intervention should be based on market, legal, etc., rather than direct intervention by administrative means. Bank operation performance is affected not only by executives effort, but also by the entire financial environment and the banking industry competition. In order to better use DEA comprehensive performance evaluation method, the inspection and selection of the corresponding key evaluation index is the prmise to ensure fair assessment results. On the other hand, for the direct quantitative evaluation of the bank's policy financial business, the evaluation methord that is based on fuzzy algorithm needs to be constructed. Meanwhile, objective relative performance evaluation is in favor of establishing and perfecting the incentive and restraint mechanism of the bank management personnels. The financial crisis reveals that, banking industry radical short-term incentive mechanism makes the financial innovation become the tools for price speculation, excessive risk-taking, avoiding regulation and contesting profit with customer. Linear incentive contracts under principal-agent framework have serious limitations, and go against the realization of bank long-term target. Starting from the implicit incentives of internal promotion and accountability, we should establish and improve Chinese banks'effective incentive and restraint mechanism, according to the unity requirement of right, responsibility and interest, in order to continue to enhance the bank's core competativeness and capacity of sustainable development.