A Study On Commercial Banks’ Asset Transfer Based On The Perspective Of Capital Constraint

Commercial Banks assets transfer refers to the commercial Banks to sell poor liquid assets in the balance sheet by different ways and release cash,then invest the other poor liquid assets.In this way going round and beginning again.Under the condition of invariable in risk assets,the banks can realize the earnings growth.The purpose of this article is to research the assets transfer from the perspective of capital constraint.‘Revitalizing the stock,making good use of increments’,putted forward by the state council in <the guidance of financial support for transformation and upgrading of economic structure >.On the one hand commercial banks asset transfer respond to regulatory and macroeconomic regulation and control policy,on the other hand it’s also the requirement of coping with capital constraints.In this paper,both the qualitative method and quantitative method are used.Also there are both normative analysis and empirical analysis.Compared with foreign Banks’ assets transfer practice,the paper concludes commercial bank asset transfer’s direction of improvement in our country and abandon the unreasonable practices abroad.The whole article follows the logic thinking: commercial Banks face more and more strong regulatory capital constraints which influence commercial Banks’ operations.Banks need to take various measures to deal with capital constraints.There are three main ways including supplementing capital,asset reallocation and asset transfer.In this paper,through the normative and empirical analysis to confirm the asset transfer is optimal way.Thus to develop the asset transfer business has theoretical and practical basis.Our country commercial bank asset transfer business is at the early stage of development,and has a large gap with the international bank.By combing international Banks’ asset transfer operations,its essence is taken and its dregs is discarded.In the end related policy Suggestions are putted forward.The paper includes 7 chapters.Chapter 1is the introduction,to illustrate in detail the paper research background and significance.Also the chapter listed the related theories such as the theory of financial innovation,theory of assets and liabilities,asymmetric information theory,financial intermediary theory and game theory.Another part of the chapter is the related research of asset transfer made by the scholars home and abroad.Chapter 2 is about the influence over the commercial banks’ operation by the capital constraints.Firstly the chapter recalled the development of capital regulation.The commercial banks will make financial innovation in order to increase profit.On the contrary,the regulatory authorities strengthen supervision to prevent financial innovation in case of financial risks.The game between the two sides promote the spiral development of regulatory capital.This chapter in details analyzes the influence of capital constraints on commercial banks,from the aspects such as profitability,operating performance,the credit behavior,the financing efficiency,and the real economy,etc.On the basis of theoretical analysis,the article further build model to prove the impact of the capital constraints on banks’ profitability,the credit behavior and the cost of financing.Chapter 3 compared three ways of coping with capital constraints and make conclusions that the way of asset transfer is the optimal way.One way is to supplement capital.The particular form of supplementing capital includes IPO,secondary offering,issuing subordinated bonds,issuing convertible bonds,etc.The way of asset allocation is mainly to increase the investment proportion of low risk weighted assets.There are lots of shortcomings in the ways of supplementing capital and asset allocation.By contrast,the way of asset transfer has many advantages.These advantages are as mentioned below.Not to require high capital requirement,not to affect the profit ability,to improve the quality of assets,to suit for the environment of interest rate liberalization and financial disintermediation,to keep up with the trend of bank’s development.In Chaper 4 the empirical validation was mainly made.Firstly,through the derivation method the paper further demonstrates the asset transfer is the optimal choice of dealing with capital constraint.Secondly,based on the financial data of 16 listed Banks,this paper used DEA efficiency measurement method to verify the way of assets transfer is the highest in terms of financing efficiency.Lastly,through the regression analysis of 157 AAA CLO(credit loan obligation)product,the chapter drew the conclusion: the financing costs of assets transfer are associated with the sponsor credit.Chapter 5 is about the experiences and lessons of foreign banks’ asset transfer.The article respectively lists the assets transfer businesses of the United States,Europe and Asia countries,and summarizes their respective advantages and disadvantages.The experiences worthy of learning by our country’s banks include: improvement of product standardization,diversification of market institutions,improvement of the system of trade and intermediary services,diversification of products range,the support supplied by the local governments and so on.The lessons Worthy of taking includes: ABS underlying assets should be fully diversified.Moral hazard of the sponsors needs to be paid attention to.Excessive securitization should be prevented,information disclosure mechanism needs to improve,and so on.Chapter 6 combed the development of our country commercial banks’ assets transfer.The chapter gave a detailed description of CLO,the transfer of credit loan,non-standard asset transfer,NPL transfer.The bank assets transfer in our country has obtained certain development,but there are still some shortcomings.For example,the stock of CLO is small.The process is complicated.The products structure is not reasonable.The market liquidity is poor.The pattern is single.Chapter 7 putted forward the policy recommendations on the banks’ asset transfer on the basis of the experiences and lessons of other countries for reference.The detailed aspects are as followed.For CLO,MBS,small and medium enterprises securitization,private placement securitization of credit assets should be encouraged.Securitization SPV should be diversified.all asset securitization should be implemented.product innovation should be stimulated.For the transfer of credit loans,the center of banking credit assets register and transfer should be bigger and stronger.The credit assets transfer supporting measures should be improved.The categories of CLO should increase.For the non-standard assets,non-standard assets securitization businesses should be supported by the supervision authorities.non-standard assets transfer businesses through the center of banking credit assets register and transfer should be promoted.For the transfer of NPL,The government should intensify the support of non-performing assets securitization.Technical means should be improved.The center of banking credit assets register and transfer should be the important platform of NPL.In the paper there are several innovative ideas.Firstly,the research of commercial banks’ asset transfer was based on the perspective of capital constraints.Secondly,the conclusion was drawn,in which the way of asset transfer is the optimal one coping with capital constraints for commercial banks.Thirdly,through using the experiences of other countries for references,the policy suggestions of banks’ asset transfer businesses were put forward.