Research On Reform And Development Of City Commercial Banks

Since the start in early 2004, the reform of commercial banks has gone popular all over the country. As the reform of the state-owned banks got breakthrough, the reform of city commercial banks is being quickened. The existence and development of city commercial banks is evidently essential, along with the state-owned banks, to the healthy development of China's banking system. With the development in recent ten years, city commercial banks have taken some market shares in the fierce competition, and gradually formed the characteristics, such as flexible operation mechanism, acute transferring system, rapid expansion of asset scale, and evident geographic advantage. Due to the small operation size, large amount of non-performing loans, poor creativity and resistance against market fluctuation, and administrative intervene from local government, however, it is urgent for them to change the present style of existence.Under the background, this paper emphasizes on the decision of strategic goals and the determination of development focus in the reform and development of city commercial banks with the combination of theoretic analysis and empirical research. There are four parts in the paper:The first part introduces the relationship between financial development and economic growth, financial supervision theory and Basel Accord, corporate governance theory, governance theory of commercial banks, etc., paving the way for the illustration later.The second part overviews the historical development and today's performanceface, then analyzes the questions and challenges.The third part explains the necessity of the reform, looks back on the main measures and effects of the past and the present, and discusses a lot about the reform on operation mechanism, corporate governance structure, regional restrictions, restructuring, internal control system perfection and risk management.The last part illustrates, from two aspects, i.e. strategic decision-making and development focus, that how to perform for city commercial banks facing challenges, in terms of selecting their own development strategy, giving full play to their advantages, putting emphasis on serving for the local economy, small-and-medium enterprises and city residents, boosting management system, making human resources management flexible, improving service quality, and finally finding a way for their sustainable development.