Study Of Property Rights Reform Of State-controlled Commercial Banks

The financial crisis that evolved from Subprime mortgage crisis has brought about bank nationalization in main Capitalist countries. On the contrary, the four majior commercial banks of China have completed shareholding reform with the foundation of Agricultural Bank of China Ltd. in January 2009. Does bank nationalization caused by the financial crisis deny the past non-nationalization reform? What are the problems of state-controlled commercial bank left after shareholding reform? What are the reasons for these problems? How to solve these problems? What is the orientation of the property right reform of state-controlled commercial bank? In the domestic background of promoting financial system reform and the international background of financial globalization and liberalization, studying and solving these problems theoretically can perfect the theoretical systems of socialism with China characteristics and explore the modern property system of commercial bank, and practically will contribute to deepen the property right reform of the four majior commercial banks in China, improve the performance of Chinese banks, increase the efficiency of financial industry, and prevent and cope with financial risk.In light of the research thinking of"problems-reasons-countermeasures", the main body of this dissertation contains three parts as follows:PartⅠProblems (Chapter 1 and 2)The reform and development of the four majior commercial banks in China can be divided into four stages: Great unity, Specialization, Commercialization and Shareholding reform. It is suggested that shareholding reform is effective according to the standards of 7 indexes classified into 3 types. However, there are also a series of problems left, including the financial safety problem caused by state-controlled commercial bank's introducing strategic investors, the gap between state-controlled commercial bank and external advanced bank in corporate governance, risk and human resource management, etc. and the increasing difficulties in financial supervision caused by shareholding reform and getting listed, financial innovation and integration of financial industry.PartⅡReasons (Chapter 3)The root of the problems in state-controlled commercial bank after shareholding reform is the incomplete property right reform and the highly centralized equity structure. The State-owned shares including the State shares and the State-owned corporate shares take up over 70% in the four state-controlled commercial banks(that is 57.02% in China Construction Bank), and the problems that policy making subject is mixed with market subject can't be solved. Hence, true corporate governance mechanism can't be established, and the current operation situation of high cost and low benefit can't be changed completely. Therefore, deepening the property right reform of state-controlled commercial bank is imperative under the situation. Then the orientation of deepening the property right reform is explored from the aspects of both theoretical summary and practical experiences. Firstly, most scholars at home and abroad advocate the property diversification of commercial bank and the reduction of State-owned shares. Secondly, the historic change and its basic laws of the property system of commercial bank in main countries also suggest that property diversification is the historic trend of the property system transition of commercial bank, and is certainly the development trend of China. Lastly, bank nationalization caused by the financial crisis is the episode in the theme of property diversification.PartⅢCountermeasures (Chapter 4 and 5)We should establish the property system with Chinese characteristics of commercial bank on the basis of respecting objective laws and analyzing the basic situation of China. First of all, there are necessity, inevitability and feasibility with property diversification based on the achievements of shareholding reform. It is the inevitable orientation for state-controlled commercial bank in deepening the property right reform to establish the modern property system of commercial bank with the core of property diversification. Second, the foremost step of establishing the modern property system of commercial bank is to optimize the property structure. Its target model should be the property structure with certain concentration and relative controlling shareholders. The reduction of State-owned shares is an effective approach, which has been soundly proved by the fact that Total Factor Productivity (TFP), Return of Equity (ROE) and Return of Assets (ROA) of the three banks which have completed shareholding reform and got listed are rising with the reduction of State-owned shares. Finally, the three-step strategy of the property diversification of state-controlled commercial bank is put forward as follows. First, Agriculture Bank of China should speed up capital introducing and listing. Second, three state-controlled commercial banks should keep on optimizing the property structure. Last, the property structure containing both moderate centralization and relative controlling State-owned shares should be constructed.We should insist on the reform orientation of property diversification of state-controlled commercial bank, and carry out institution innovation related to property right reform as well. We should perfect corporate governance mechanism and get to mutual promotion with property right reform, steadily push forward integration of financial industry to broaden the resource of profit and diversify risks, positively explore the reform of political democratization to cut off the root of government's over interference in state-owned enterprises, and improve financial market system and the laws concerned to ensure that property right can be traded freely.This dissertation adopts the methods of combining logics with history and normal analysis with empirical analysis from the perspective of Maxism. Quantitative analysis is mainly used when it refers to the contribution of the reduction of State-owned shares.The main innovations of this dissertation lie in research method and research conclusion. Firstly, this dissertation empirically analyzes the contribution of the reduction of State-owned shares to TFP, ROE and ROA, using the production function y = f ( K , L )= AKαLβand the case of the three banks which have completed shareholding reform and got listed, which is the innovation in research method. The results are as follows:ⅰ)TFP of the three banks increase after shareholding reform, whether the input is set to be pure or total assets, whether the output is set to be profit before tax or added to interest expenditure, and whether the elasticity of laborβchanges or not.ⅱ)Both ROE and ROA of state-controlled commercial bank obviously increase as the proportion of State-owned shares falls. Secondly, the innovation in research conclusion includes:ⅰ)The relationship between the financial crisis and property system of commercial bank is analyzed. It is concluded that only by the combination of property diversification, risk management and effective supervision, can the financial crisis be prevented effectively.ⅱ)The orientation for state-controlled commercial bank in deepening the property right reform is to establish the modern property system of commercial bank, whose basic connotation is that the subject should be clear, the constraints should be stringent, the property should be diversified, and the trade should be free. Its core is property diversification, its target model is the property structure with certain concentration and relative controllers and is the one containing both moderate centralization and relative controlling State-owned shares as for China, and its effective approach is the reduction of State-owned shares.