A Study On The Alienated Behavior Of State-owned Commercial Banks In China

As viewed from economics, the commercial banks are defined as special enterprises engaged in the management of currency. It is an objective of the commercial banks that the profit is maximized. But some behavior of the state-owned commercial banks of China have alienated from this goal. The alienated behavior usually increase the banks' own risk, and weakens the effect of economic policies that the government makes. This paper has analyzed the reason and consequences of the alienated behavior, try to explain the relation between government policy and the behavior of the bank, in the hope of making the market leading signal of the financial administrative authority more reasonable, so that can standardize the behavior of the state-owned commercial banks.The paper is divided into five parts to explain the above-mentioned problems. Chapter one gives an explanation to the basic reason of the alienated behavior, and put the emergence of the alienated behavior down to dual-goal contradiction and the administrative restrictions on the managers of the state-owned commercial banks. The succeeding three chapters make a concrete analysis to excessive price competition, credit rationing and risk postponement. Chapter two argue that, the non-monetary benefit that the deposit scale brings to the state-owned commercial banks is the immediate cause of excessive price competition in the deposit market, the competition will not increase the deposit scale of any bank, but raise the cost of banks instead. Chapter three thinks that credit rationing and credit concentration are both the result of the financial risk avoidance which is caused by asymmetric information. These two kinds of behavior have not caused an obvious negative effect on the banks' business, but have aggravated the degree of dual economy. Chapter four explains at first the possibility of the risk postponement and concealment, and then points out that a short-term goal in risk control makes the state-owned commercial banks postpone and conceal the risks. The result is an increase in short-term profit and a worse in long-term assets quality. Chapter five is the final part. On the basis that the previous four chapters have analyzed the reason and consequences of the alienated behavior, chapter five put forward some countermeasures on how to standardize the behavior of the state-owned commercial banks.