Researches On Moral Hazard Of Our State-owned Commercial Banks

The State-owned commercial banks (SOBs) are the main body of our banking and they represent the trend and future of China's economy. Because of this,the four SOBs' reform is being concerned by all sides of China .This thesis cares about the reform from an angle of view on moral hazard as a little of contribution for our banking."Moral hazard "means the risk that one party to a contract can change their behavior to the detriment of the other party once the contract has been concluded. In this thesis ,the moral hazard problems conclude not only the SOBs' moral hazard as the agent but also the moral hazard that others bring to SOBs.Since it is not too long time studying on moral hazard in banking in China,this thesis talks about from the derivation of moral hazard and summarizes the literatures and practices on banks of abroad and China. These are set in chapter two. In chapter thee,we describe the moral hazard systematically existing in the four SOBs and theses moral hazard problems conclude governments,borrowers,regulation institution and commercial banks self and etc.In chapter four,we demonstrate the reasons of moral hazard mainly in game theory and principal-agent theory. There are such reasons : the supervision on the four SOBs of the whole people as the principal is seriously not enough;the principal-agent chain is too long so that the information are seriously asymmetrically;government's implicit guarantee and "too big to fail" causes the SOBs have an incentive to take on excessive risk;borrowers' adverse selection ex ante and breach of faith ex post;inner-control andOuter-regulation is too sick.The last section,we put forward some advice . The SOBs shall carry out property right system's reform and change their organization frame,provide incentives and imposing disciplines,set up deposit insurance system ,enhance credit construction and strengthen the inner-control and outer-regulation .