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Corporate Governance Optimization Of City Commercial Banks In China

Posted on:2013-02-15Degree:DoctorType:Dissertation
Country:ChinaCandidate:X G LvFull Text:PDF
GTID:1119330374468753Subject:Agricultural economy and project management
Abstract/Summary:PDF Full Text Request
As an important part and a special group in financial industry in China, the citycommercial bank plays a positive role in improving the city and county's financial servicesystem, providing financial services to rural and urban residents, and promoting localeconomic development. At present, city commercial banks in most areas have got rid ofsurvival problems, their business conditions have been improved significantly, and theiroperation and management also change from extensive to intensive, so it seems that theoverall development has entered healthy channels. With the city commercial bank entering anew phase of its reform, the problems it faces and the goals it aims for are undergoingtransformation, so are the form and substance of corporate governance. Compared with otheradvanced banks, the corporate governance of the city commercial bank is relatively weak,which seriously causes its weak competitiveness and unstable operation. Then it's inevitableto improve its corporate governance in order to enhance its corporate value. Therefore, as thebanking system has entered a higher level of competition, it is particularly urgent to study thecorporate governance issues in the city commercial bank.Optimization means to maximize desired aspects while minimize or give up some lessdesired aspects, which is similar to survival of the fittest or the selection of the superior andelimination of the inferior. Therefore, as an important tool of management science,optimization is trying to find the best from a number of strategies and means under theguidance of established goals. Meanwhile, city commercial banks often take a lot of risks.With its operating environment, products and services changing, the form of the risk is alsobecoming more and more complex and diverse. The current rapid development of this groupalso shows its relatively high-risk feature, so in the present developing stage, it is a must tofocus on the robustness when studying the optimization of the means to solve corporategovernance problems in city commercial banks.Based on the listed reasons above, with solving the corporate governance problems inthe city commercial bank as the starting point, under the support of modern management theory, taking the particularity of the corporate governance into consideration, this paper goesthrough a thorough selection of the main optimization means of improving the corporategovernance in city commercial banks in China. The study focuses on the ownership structureoptimization, merger and reorganization, reconstruction of incentives, business processreengineering, external governance improving and other optimization strategies that areclosely combined with the current situation of city commercial banks. It not only has athorough explanation and analysis of those optimization strategies, but also providesempirical researches and policy recommendations. This paper is divided into ten chapters,which are:Chapterâ… . Introduction. A series of crisis makes financial theory filed and practical filedproposing higher requirements on company management. And the fundamental function ofbank management attaches more attentions. City commercial bank stays at high-speeddevelopment period with outstanding risk caused by incomplete governance. The abovementioned is basic background of this thesis. This chapter illustrates subject-selectionbackground, research significance of this thesis, making comments on research trend homeand abroad, clarifying the research clue and method, specific content and framework andpossible innovations.Chapter â…¡. Related theoretic review on company governance of city commercial bank.This chapter reviews basic theory of corporation governance on city commercial bank,efficiency theory and related theories of corporation governance risk, providing theoreticsupport for followed chapters. This chapter also explores related theoretic analysis of basicgoal, existed key problem, analysis from home and abroad, clue and method of solutions, aswell as ownership structure, consolidation and regroup, incentive system, processreengineering, external governance.Chapter â…¢. Historical evolution, current status and dilemma of city commercial bank.This chapter starts with analysis of city commercial bank historic evolution, exploring citycommercial bank current development status, and systematic factors and historic originscausing city commercial bank problems, making foundations for followed chapters. Thischapter is functioned as proposing problem.Chapter â…£. analysis on corporate governance of city commercial bank. As researchachievement from scholars, problems existed in corporate governance of city commercialbank. There also solutions to these problems. But this thesis indicates that there is greatdifference between problems and solutions, with low urgency and feasibility. Based on theoptimization proposed in this thesis, key research should be carried out selectively. This chapter screens out current corporate governance optimization method with high feasibility,high urgency and remarkable effect. Systems including ownership structure, consolidationand regroup, incentives, process management and external management screened out will beanalyzed on city commercial bank governance status and existing problems. This chapter isfunctioned as analyzing problem, and the followed chapters from chapter five to chapter nineare functioned as specific points of optimization methods.Chapter â…¤. Ownership structure optimization of city commercial bank. Citycommercial bank ownership is highly centralized in local government, minority shareholdersare over scattered, leading serious problems like distorted relations between board ofshareholder, board of directors and board of supervisors; inconsistency between shareholdersand managers; controlled by insiders. This chapter is making empirical research based onfactor analysis on ownership concentration and the nature of shareholder, on the basis ofnegative influence and risk caused by ownership structure. The result shows that, highconcentration of ownership leading high risk and low efficiency; scatter ownership makinglow return rate. Moreover, different shareholders have different regulatory behavior, whichhave their own pros and cons.Chapter â…¥. Consolidation and regrouping of city commercial bank. Consolidation andregrouping could realize risk diversification of management and huge promotion onefficiency, leading dynamic balance between risk, capital and market capitalization. And it isalso necessary to flatten negative influence of macroeconomic fluctuation. Also, high qualitycapital will be replaced into city commercial bank by capital replacement to promote capitalquality during consolidation and regrouping. Thus, promoting efficiency and risk-dissolvingare important characteristics of consolidation and regrouping of city commercial bank. Thischapter is making historic analysis and trade analysis based on DEA model of citycommercial bank consolidation and regrouping. The result shows that consolidation andregrouping decreases risk hugely, while consolidation and regroup leading increase of costand inconsistency of each branch banks' efficiency.Chapter â…¦. Salary incentive mechanism of city commercial bank. Past internationalfinancial crisis shows that the pursuit of short-term profit maximization brings long-term riskto commercial bank, even disaster to global financial system because of short-terming ofsalary system. With steadily growing of city commercial bank agencies and personnel,incentive mechanism construction should also be central point in risk management.Relatively backward of salary incentive mechanism construction leads an outstanding issue ofmanagement risk and underpowered development. The result shows that main city commercial bank risk management achievement has nothing to do with salary. This chapterproposes EVA salary incentive mechanism appropriate for city commercial bank.Chapter â…§. Process Reengineering of city commercial bank. With rapid expansion ofcity commercial bank, low effectiveness for too many management levels and long chain ofinformation transfer, leading huge increase of risk vulnerability. Moreover, series of criminalcases appears due to defect in risk management process of city commercial bank and singularrisk control method. How to revise the structure to control and prevent risk will be a majorsubject in city commercial bank development. This chapter makes research on currentpopular process mode by introducing the concept of process banking, coordinating withcurrent problem of bank process.Chapter â…¨. Improvement on external governance of city commercial bank. As for thecurrent dispute from theory field on the effectiveness of external governance and no referencecan be used for external regulatory research on city commercial banks, consequently, thisthesis is exploring empirical analysis on external governance effects of city commercial bankbased on typical analysis and market index. The results shows that, city commercial bank arewidely governed by local government for the registration place of the bank is just the citywhere the bank stay, so there is strong symbiotic between city commercial bank and localeconomy. Meanwhile, city commercial bank is engaged with financing service for localmedium-sized and small-sized enterprises and local residents, Therefore, city commercialbank are significantly impacted by local market and trust environment.Chapter â…©. Advice and countermeasure for enhancing governance of city commercialbank. This chapter proposes optimization overall regulatory plan on city commercial bank,coordinating with previous chapters' analysis on the basis of reform on risk managementsystem. This chapter is functioned as answer to the problem.
Keywords/Search Tags:city commercial bank, corporate governance, optimize
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