The Research On Institution Of Small Chinese Commercial Banks

It is still in dispute that small commercial banks are suitable to our country, although the experience of developed countries has demonstrated their importance in financial services. Drawing lessons from the experience of developed countries and using the theories of informational economics, incentive, industrial organization and development economics, the thesis has discussed two questions about the small commercial banks in China. First, are small commercial banks necessary to our country? Second, how can they survive and develop? Then, the thesis provides policy advices for the system reform of small commercial banks in China.It is discovered that small banks do better works than large banks in generating "soft" information. So, the small banks should play an important role in providing financial services to middle and small size enterprises because the latter have great significance to economic development of China. Whether the advantage of small commercial banks can be fully shown depends on the three factors: (1) they aim at the middle and small size enterprises which character of information is "soft" as their clients; (2) the abilities of division managers in small banks are higher and evener than those in large banks; (3) the incentives of long-term stock and short-term salary for CEO and division managers...