Analysis Of The Cause Of Formation Of China's Non-performing Banking Assets From Information Economics

With the reform in the economic system in China going on, the position and function of the bank are increasingly outstanding in the modern economic living. But a large quantity of the non-performing loans in the banks have also become an important unsteady factor in the economy operation and formed a potential threat to national economy development. Therefore, it is necessary to analyze and study the reason of the non-performing banking assets in China.In this thesis, the writer attempts to approach the issue with the help of information economic theory. The writer holds that asymmetric information in credit activities is the original reason of the non-performing banking assets in China, and systematic factors aggravate the information asymmetry in China's credit market, which is responsible for the huge amount of non-performing banking assets in China. First, analysis is made about the effects of adverse selection and moral hazard, which emerge from asymmetric information in credit activities in China, on the quality of banking assets. Secondly, actions between banks and enterprises in China's credit market and the motivation of banks' deregulation are deeply analyzed by the means of the game theory. Thirdly, the thesis studies how systematic factors in China aggravate the information asymmetry in the credit market from the aspects of property right, financial supervision and information announcement. At last, suggestions on how to dissolve the bank credit risk and prevent non-performing banking assets increasing are put forward in the aspects of improvement of information symmetry, establishment of incentive and constraint mechanism and elimination of systematic factors which aggravate the information asymmetry.