Research On Deregulation Effects Of City Commercial Banks In China

Deregulation is regarded as an imperative way in the process of deepening China's banking reforms periodically.Derived from urban credit cooperative financial institutions,city commercial banks in China suffer a bottleneck which will limit their further growth.One is excessive intervention of local government,the other is lack of market oriented operation and attractive banking products.Therefore regulatory authority decided to deregulate on interest rate and make an access to foreign strategic investor shareholding as typical deregulation policies to further promote their developments.Such policies are designed to increase competition,improve technological progress,corporate governance and ownership structure.In this situation,how to carry out scientific analysis and evaluation on deregulation effects of city commercial banks is an important issue to be solved urgently.By means of existing literature review,such papers were focused on large scaled state-owned and joint-stock banks.While,city commercial banks,viewed as key participants,play a prominent role in financial market,especially in supporting local economic growth.As a matter of fact,they attract more social attention.If city commercial banks are selected as independent researching objects,some new problems,new ideas and new conclusions will be found accordingly.So this dissertation focuses on city commercial banks'deregulation effects.In cases of complete market-orientation and dual-tracked regulation on interest rate,I construct an optimal net interest margin(NIM)equilibrium model to obtain the equilibrium solution.Combined with game theory analysis,I explore some key impacts of access to foreign investor shareholding on efficiency.Then,I use panel data models to test their significant relations in order to make empirical analysis.The last but not the least,I make a comprehensive evaluation index system including market-based reform degree,performance,innovation ability,decision-making efficiency and service quality,using analytic hierarchy process(AHP)comprehensive evaluation method,and put forward to some useful and practical suggestions finally.Main conclusions of this dissertation are proposed as follows:Firstly,in situation of complete interest rate market orientation,fierce competition makes NIMs gradually more narrowed.In condition of perfect competition,central bank implement macroeconomic control most effectively.In view of deposit rate cap deregulation,NIMs will be made subsequently further narrowed.Empirical results show a significant relationship between rate deregulation and NIMs.Findings also have shown that cross regional market entry has a positive and significant impact in interest rate dual-tracked system.It is also asserted that NIMs of city commercial banks have a weak business cycle effect.Secondly,this dissertation introduces a time cumulative variable,ie Time Horizon,to test how long foreign investors hold shares.Findings clearly show a significant relationship between these two variables from an better empirical point of view to reflect deregulation effect of access to foreign investor shareholding.At the same time,effect of foreign capital introduction begins to appear,while effect of talent introduction has not yet shown effectively.Thirdly,the overall result is good through comprehensive evaluation of deregulation effects,especially in service quality,which shows a different result from large scaled state-owned and joint-stock banks.Under the background of interest rate market-oriented reform and access to foreign investor shareholding,this dissertation provides evidences to examine real effects of China's city commercial banks theoretically and empirically.A number of findings in this dissertation are offered to make a more valuable practice.It is crucial for regulatory authority to make efforts that city commercial banks in our country are guided to seize opportunities,face challenges and provide higher quality services in the new economic surrounding and have a global influence on promoting sustainable developments of banking services in China.