The Disposal Of Non-performing Assets And Financial Assets Management Company Restructuring Mechanism

With the rapid development of the world economy and quickening integration ofinternational finance, the competition in the financial market becomes severer andseverer. To meet this challenge, powerful economic strength and many particularadvantages are required. In general, the important characteristic to evaluate this abilityis the quality of the financial asset. With the low quality of financial asset, frequentfinancial crisis have happened during the last several decades. The non-performingassets in the banks not only affect the stability of the bank system but also weaken itsfunction for the economic development more or less. Currently, this problem exists inmany countries as well as our country. Large non-performing assets are left to the fourbanks of our country as they boost the economic development. For example, about 3.1thousand billions of non-performing assets are accumulated in the four national bankssince 1997. They will be a big trouble for the stability and development in our countrywith the deep reform in the economy and finance. Therefore, how to solve thisproblem is impending for our banks and government. To this aim, four assetmanagement companies, i.e. XINDA, DONGFANG, CHANGCHENG ANDHUARONG, were established in 1999 to separate and deal with the non-performingassets respectively. And the deep contravention, especially in the low efficiency, hasbeen formed during the past seven years. Our country is now standing on the way ofthe economic reformation. We have entered the WTO and will fully open the financialmarket at the end of 2006. Thus, the pressure of competition from both national andinternational encounters our commercial banks. The successful solution for thenon-performing assets and high efficiency in the management will immediatelyimprove the competitive capacity and affect the development of domestic economy.Under this condition, it's necessary to give a comprehensive investigation on theproblems and difficulties in the non-performing assets. This work can explore thefundamental factors, evaluate the seven-year experience of asset management andprovide an efficient way out for future decision-making. Therefore, we will presentour study on the cause of non-performing assets and the management mechanism,efficiency and transformation strategy of the asset management company. Themethods involved in our research including comparison and analysis, theory ofmodernistic system, statistic analysis, etc.In this thesis, we mainly follow the framework of the comparing the strong and weak system under the soft budget constraint. Firstly, we analyze the serious degree of the non-performing assets in our commercial banks with comparison methods. We find that the fundamental reasons reside in the 'one-strong and two-weak' system arrangement, i.e. with the planned economic system, the government play a very...