Risk Accumulation, Shock And Guarding Of State-owned Commercial Banks In Open Economy

China's commercial banks are now in a special historic period of the open-up and reform. As a developing country, China is now being faced with the further open-up of the economy and finance, and busy with reforming the commercial banks and the market system. The state-owned banks were rooted in the planning economic system, but they should plunge into the fierce competition with the foreign banks. In the process of the fast transition, the risk accumulated in the old system becomes more and more serious, which cannot be smoothed out in a short period. Meanwhile, the state-owned banks should face the shocks and the challenges from the outside. In the uncertainty brought by the market-oriented reform and the shocks caused by the external environment changes, there are higher requirements for banks' stability and its ability to deal with the shocks. How to consider the probability of the outbreak of the banks' risks and shocks, and solve the problems accordingly to make the commercial banks survive the shocks and retain their competitiveness? It has become a subject of important theoretical and practical value. Here lies the object of this paper.In this paper, the author has adopted the following methods. First, the empirical method and normative method have been used together. In the study of China's banks' risk accumulation, competitiveness, and the comparison between the domestic banks and the foreign banks, the author has done a lot to collect, deal with and analyze the relevant data to keep the data complete and truthful. The normative method has been done on the basis of the empirical analysis. Some case studies of the Southeast Asian financial crisis and the Mexican financial crisis have been done to find out the commonness of the bank crisis to provide some suggestions for China's banks reform. Second, the historical analysis and the practical analysis have been adopted in this paper. The historical analysis is used for the study of the practical problems to find out the root and solution for the practical problems. Finally, theauthor has paid special attention to the institutional analysis. In the analysis of the risk accumulation of China's banks, the institutional factors have been considered as the most important point. The market-oriented reform of the interest rate has been considered as the key issue determining the banks' stability. In raising the new concept of the banks' risk controlling, it has been emphasized that we must begin with the financial regulation, the lender of last resort system and the deposit insurance system, and that the healthy institution arrangement and designation are necessary for the stable management of China's banks.The author has considered the most urgent and important issue in China's reform in a unique perspective. With the state-owned commercial banks as the object of study, with the open economy as the economic environment, the state-owned commercial banks' unique development and reform and the external environment elapse have been focused on. Based on the analysis of the Southeast Asian financial crisis and the Mexican financial crisis, the new concept and idea for China's banks' ability to guard against risks have been put forward. According to the author, though a lot of risks have been accumulated in China's state-owned commercial banks and there are various internal and external shocks, if we take the gradual reform experience and the measures taken or being taken into consideration, China can not only keep the bank system's stability, but also deal with the challenges and shocks of all kinds successfully, provided that the commercial banks' reform has been furthered in the market-oriented concept and the bank regulation and the market environment have been constructed healthily.