Positive Research On The Efficiency Of Commercial Bank Of China

Commercial bank plays an important role in economy since it has beenborn. The reform and development of commercial bank are paid moreattention in recent years. Much research has been done on commercial bank,some are on macro, for corporate governance, bank system structure, bankregulation, etc, some are on micro, for business innovation, risk management,etc. The research has put forward a lot of beneficial suggestions on thedevelopment of commercial bank.In order to understand commercial bank more clear, this paper coverresearch on micro, models are used to investigate the efficiency ofcommercial bank. Parametre approach and non-parametre approach arecompared, since commercial bank is not like company that producecommodities, its function is difficult to define, so non-parametremodel-DEA/PS is used to compute the efficiency of commercial bank.Commercial bank is a financial a risk management institution, so interestexpenditure, operating expenditure, other liabilities and deposit are inputs,interest receipts, non-interest receipts and loans are outputs. Form the result,we see that the efficiency is high and change little, state banks are the highest,city commercial banks are the lowest. In order to know what make thesedifferent, risk, cost management and earning power are investigated. Toimprove bank efficiency can be done by change E/A, liquidity rate, operatingexpenditure/operating receipts, income of commission charges/total income,ROA and interest receipts/total income.Since everything can not be covered in one paper, future research isdescript in the end of the paper.