Protection Of Investors' Interest, Promotion Of Efficiency And Risk Control

Practices and experiences of modern commercial banks' development prove the fact clearly that what a governance structure a bank chooses and designs plays a key role in both its performance of management as a whole and its capability of prevention against risks as well. Although China has affirmatively committed a timetable to open her banking industry since she signed the concerning treaties as a member of WTO, China's commercial bank's explicit deficiency and weak competitiveness expose China to a crucial test after her entry into WTO. In order to enable China's state owned commercial banks comply with international practices and compete with internationalized banks, modern enterprises system has to be constructed to reform the state owned commercial banks in China. Therefore, it is theoretically and practically important to expedite an efficient governance structure for the state owned commercial banks by exploring the state owned commercial banks governance structure on the level of system and regimes.At the beginning, this paper defines the concept and major contents of the commercial banks' governance, and subdivides the governance into external and internal ones respectively, holding the idea that the ultimate aims of the governance are not only to protect the interest of the investors and enhance the commercial banks' efficiency, but also to avoid risks. After that, the paper summaries and reviews the theories, approaches and documentations concerned with modern enterprises governance and commercial banks governance, compares and analyses the commercial banks internal and external models of supervision and control, and points out that since 1980s, the two models have complemented each other with reciprocal strong points and gradually tend to be evolving into a converged pattern, based on the fast development of the world economy integration and finance globalization as well as the intensified competition in the field of international finance. Based on this, the paper explores in detail the relationship between the commercial banks' internal and external governance mechanisms and their aims concerning ownership structure, board of director system, mechanism of incentives and restrains, market...