The Study About Vulnerability Of Bank System

The intrinsic vulnerability of bank system has been shown hi the classical economists' early elaboration. With the development of economy, the increasing complexity of economic relations and the constant emergence of financial innovations, the inducements of vulnerability in bank system are becoming more and more diversified. The dominance of bank system in financial system determines the dependence of stable financial system upon the stability of bank system, which in turn exerts a strong influence on the security of national economy and the movement condition of macroscopic economy. Therefore, study about the vulnerability of bank system is of profound practical significance. The entrance of China into WTO signifies the penetration of Chinese bank system into the global finance integration advancement as well as more and more impacts and tests. In view of this, taking the analytic method with reference to achievements in the related studies, this thesis researches the vulnerability of Chinese bank system and discusses its intrinsic mechanism in terms of structure of property rights, soft restraint of budgets,credit condition and information, and further attempts to take the property rights as the breach to the improvement of Chinese bank system.The main body of this thesis is composed of four parts:Part 1 elaborates the intrinsic vulnerability of bank in terms of theoretical development and realistic causes. The bank vulnerability has been matter of concern in the works of economic historian and the institutional school. The classical economists such as Marx, Marshall, Keynes mainly describe and analyze bank crisis from the angle of economic cycle, Minsky and Kindleberger introduces the behavior factor of microscopic main body into the analysis of bank vulnerability. The development of the game theory and the information economics lay a solid foundation for Stiglitz and Weiss's study about bank vulnerability. Meanwhile, the characteristics and structure of bank management also determine its intrinsic vulnerability. Realistic causes of vulnerability of bank system are attributed to loose control, financial liberalization, internal control ,macroscopic environment,etc.Part 2 presents the judgement and measurement of the vulnerability of Chinesebank system. In this part, a conclusion is made that the distinctive qualities of vulnerability of Chinese bank system to a larger extent lie in its switcher economical characteristic shown in the system and organization risk deriving from institutional arrangement and evolution than its weak relevance to the macroscopic economical variable, the financial variable and exterior impact variable.Part 3 elaborates the vulnerability of Chinese bank system from view of institution on the basis of the previous pare. A thorough analysis of the vulnerability of Chinese bank system is carried out in terms of the institutional reform advancement, the system of ownership form and the principal-agency relations5, with emphasis on the characteristics of different stages in the institutional reform.Part 4 proposes the property rights as the breach of Chinese bank system reform should take the thorough separation of the ultimate property rights and the legal personal property rights as the prerequisite and take the joint stock system as the ultimate form. Due to the strains in Chinese bank reform, the author views that, on the basis of the reports at the 16th National Peoples' Congress, the joint stock system reform with flexibility, emphasis and division ought to be conducted and state-owned capital ought to fade out of the domain of competitive commercial bank. This view is of feasibility in both theory and practice.