The Study On Information Disclosure System Of China's Banking Industry

Banking industry is known for its high liabilities which obtains fund mainly from depositors. Most importantly, commercial banks play a pivotal role in a country's financial sector, which means strong external impact. Consequently, leading international organizations and developed countries attach great importance to the information disclosure of commercial banks. After the collapse of Barings Bank and the outbreak of south-eastern Asian financial crisis, the information disclosure has drew increasing attention.After China's entry into WTO, it is an urgent task to improve the transparency in whole economic field, particularly in the banking industry which is undergoing institutional reform. It is generally accepted that more information disclosure and transparency means more market discipline for the banking industry, which eventually leads to a better-standardized banking system. Furthermore, better transparency is consistent with the aim of protecting the interests of depositors and other customers, as well as promoting a safe and sound banking industry in China.Strictly speaking, the information disclosure of China's commercial bank started with the establishment of the Shenzhen Development Bank Co. Ltd (hereafter referred to as SDB), which was the first joint-equity commercial bank to issue stock to individuals and got listed. In 1988, SDB released the 1st annual report which was composed of introduction, the board of directors and management, scope of business, projects and investing enterprises funded by SDB, balance sheet, income statement, overview of performance, auditing report, institutional structure, address and phone numbers. This event was viewed as ground-breaking. As of June 30, 2006, there were 8 commercial banks listed in oversea stock market including Bank of China, China Construction Bank, Communication Bank, SDB, etc. which represent the relatively-high level of information disclosure. Presently, there are another three medium-big banks are actively prepared to get listed, such as Industrial and Commercial Bank of China, Industrial Bank, China Citic Bank. This reflects high quality and diversity of information disclosure which lays solid foundation for comprehensive reform and being listed. Some city commercial banks are undergoing piloting program of information disclosure, they also compiled and released annual reports which highlight the character of their management and products. As for non-banking financial institutions such as investment companies, they are allowed to adopt information disclosure system as of...