The Study On The Effects Of Deleveraging On Financial Performance Of Chinese Listed Commercial Banks

During the global financial crisis that initiated by the American Subprime crisis, the crazy highly leverage is considered to be the sinner. So the governments all over the world have to require the financial institutions deleveraging. In this way, the financial risks will be reduced. After the appearance of the "Basel III", the supervised requirement of the international banking have reached a historic highly stage. It is an immense test to Chinese financial market that is opened gradually to international financial market. Although the Joint-stock reform of the Commercial Banks in 2003 raised security of the Chinese Commercial Banks a lot. It also help the Chinese banking pass through the Subprime crisis. In the post-crisis era, we must face to the question that how to develop the international competitive strength of the Chinese banking, and how to lead Chinese banking a healthy developing way. The competition in the international market is more and more intense day by day. When our country formulate the policy about the banking, it becomes the key point that how to ensure the profitability of the Chinese banking. This is a realistic economic topic.There are five parts of the paper. The first part introduces the research background and meaning, describes the relevant literature review, research ideas and methods, the innovation and the weakness; The second part is the definition of related concepts and the preliminary analysis about the relationship between deleveraging and financial performance of the Listed Commercial Banks. This part mainly delimits the definition of leverage and deleveraging. At the same time, the analysis of the relationship between deleveraging and the security, profitability and liquidity of banks can explain that deleveraging may decrease the profitability of the Listed Commercial Banks and increase the security and liquidity of the Listed Commercial Banks. Meanwhile, it may improve the fragility of the Listed Commercial Banks. The third part is the effects that deleveraging influences the global banking. It presents the content of the "Basel III", the effect that deleveraging influences the global banking and the policy to respond the global financial crisis and deleveraging in China. We can get the effects that deleveraging in fluencies the financial performance of Chinese Listed Commercial Banks by analyzing the data. The fourth part is the empirical analysis. It selects the data of Chinese Listed Commercial Banks from 2000 to 2009, and constructs the Panel Data Model. Then, this part has a regression analysis of the effects that deleveraging influences financial performance of the Chinese Listed Commercial Banks. The fifth part sums up the theoretic and empirical conclusions of the paper, and then, promotes a series of policy proposals.It can be seen from this paper that deleveraging may decrease the profitability and increase the mobility of Chinese Listed Commercial Banks. At present, the security of Chinese Listed Commercial Banks appears a wonderful standard. But China is a country that maintains supervising before the questions appearing. So it makes Chinese Listed Commercial Banks. It results Chinese Listed Commercial Banks lacking of flexibility and effects on the profitability of banks. Both state-owned Listed Commercial Banks and joint-stock Listed Commercial Banks increase their profitability by the country's help. Our country protects the banking so much that banks in China can't run well by themselves. So they can't deal with the crisis that they meet. It will cut down the international competitiveness of Chinese Listed Commercial Banks. We are currently in the post-crisis era. Therefore, Chinese Listed Commercial Banks must train their ability of independent. Chinese financial market is opening day by day. It means the banking will be developed by itself. So the government should change their attitude to the banking and let the banking to improve freely. From the banking aspect, deleveraging may add their security and liquidity. But how to find the balance of the security, profitability and liquidity of banks in such economic circumstance, as well as, have the most profitability is a trouble. The banking must change their way of operation and improve its international competitiveness. In this way, Chinese banking will win a place on the world stage in this opening time of financial market.