The Research Of Capital Adequacy Ratio Of China's Commercial Banks Based On The Denominator Strategy

Capital adequacy ratio is one of the most important indicators measuring the commercial bank's capability of operation and buffering against risks. The new Basel capital accord (BaselⅡ)further strengthen how important the capital adequacy supervision is ,the new Basel establish the comprehensive risk management and the quantity risk measurement. The new"The commercial bank capital adequacy management"in our country testify the thoughts of catching up with the international capital supervision. It makes that strengthening capital adequacy management, adapting to the change of supervision environment, towards to the capital restrict modern operation period be the emergent thesis of our commercial banks.First of all, this article reviewed and analyzed the recent conditions and the reasons leading to the low capital adequacy ratio of our commercial banks. Because the"numerator strategy", the headquarters enlarge the capital, testify that it is useless in improving the capital adequacy ratio in practice, the capital adequacy ratio is still descending. It testifies that the key reason is the over-enlargement of the risk capital, not taking into account of the"Denominator strategy".Then it analyzed the influence of the risk assets management to the capital adequacy ratio in respect of the branch banks, as the risk assets management is carrying out in the branches, using theoretical and practical analysis, qualitative and quantitive analysis, we can see that the commercial banks don't have the consciousness of the risk assets management, don't have a complete and reliable system of risk control, and don't know how to control the scale and structure of risk assets, and how to degrade the risk of assets through the mitigating factors. Finally I raise some proposals, such as taking into account the actual conditions, learning from the international commercial bank development trend and the need of new Basel. We need to bereave of and adjust the risk assets, deal with bad assets, bring down the risk assets ratio, and increase the risk mitigating factors. What more important is to build a road adaptable to improve the capital adequacy ratio, according to the development of the risk management of the international banks and the need of BaselⅡ,We should establish comprehensive risk management and improve risk measure technology. Economic Capital Management has been theoretically and empirically testified for its critical role in managing risk in banking system. Therefore, comprising it into managing tools would be the next step. And I explored an adaptable framework for implementing Economic Capital Management,...