The Study Of Capital Management Of Commercial Banks In China

Capital is the prerequisite and foundation of commercial banks. The quantity and structure of the capital will influence the safety of the commercial banks, and then influence the stability of the whole society. So, capital is the focus of the stringent supervision. To modern commercial banks, the capital management is not the simple management of a certain capital, but includes the abundance of banks' regulatory capital, risk management, financial management, etc. Capital management is made up of two major parts: external and internal capital management. External capital management is that the supervisor stipulates, supervises and regulates the capital adequacy. Internal capital management is that banks manage capital on the basis of the need of safety and earning capacity. Risk measurement, measurement of the business performance and the checking and calculating of capital cost are the three major foundations of internal capital managementThe Basel Capital Accord of 1988 transformed the concern of banking supervision from the inside to the outside of banks, integrated the quantity of banks' capital into the quality of them by requiring adequate capital in accordance with the risks of their assets, so have deeply influenced the capital management of commercial banks. Compared with the original Basel Capital Accord, The New Capital Accord requires the according capital of all risks including credit risk, market risk and operational risk, and puts forward a series of progressive methods of measuring the capital which can be flexibly chosen by banks. The new one attaches more importance to banks' internal system of assessing risks than to the capital adequacy, for the first time, truly connects capital management with risk management. Banks are not only to passively meet the minimum needs of capital adequacy, but to match capital level with risk level by strengthening internal risk management.For a long time, commercial banks in China pay attention to the assets and debts management, but neglect the capital management. There are many problems among the commercial banks in China, including the possible continual worse in capital adequacy, the single structure of the capital, the unreasonable composition of the capital, the large amount of risk-weighted assets, the low capacity to make profits, the absence of channel to supplement capital and raise the ratio of capital adequacy, and the relatively low level of quantifying risk assets. All these problems will seriously influence the sound development of the commercial banks of our country. In order to cope with the challenge from the internal and international financial market, commercial banks in China should provide for a rainy day, make full use of the advanced managing experience of international banking, raise capital by all possible means, make capital structure perfect, continue to improve the quality of assets and the capability of making profits, set up preliminary system of assessing risks with concentration on Internal Ratings-Based Approaches, and standardize the disclosure of information in order to improve the level of the capital management and strengthen the ability to resist financial risks.