Study Of CAR Management Of Commercial Banks In China

Sound operation of commercial banks plays a vital role in the stability of one country and global economy. From introduction ot BaselⅠin 1988 to BaselⅡin 2004. and then to adoption of Basel III on 12 September 2010, enough to be seen the important position of CAR in banking supervision. Commercial banks to meet regulatory capital requirements, CAR management is especially important. Following the introduction of" The notice of on the proportion of assets and liabilities of commercial banks'management" inl994,China Banking Regulatory Commission promulgated and implemented, "CAR of commercial bank management" in 2004, too,required commercial banks meet the minimum capital requirements at the latest 1 January 2007. The CBRC issued the "China's banking industry guidance on the implementation of the New Capital Accord" in February 2007, required the large domestic banks began to implement the new Basel Capital Accord at the end of 2010, other domestic commercial banks should be fully implemented the new Capital Accord no later than the end of 2013. As a result, China's commercial banks have to take many measures to improve their capital adequacy ratio,such as introducting the strategic investors, reducing risk positions, for listing and capital increase, issuance of subordinated bonds, stripping non-performing assets, retained earnings into capital and so on. While countries injected the financial and tax return to commercial banks as soon as possible to meet regulatory capital requirements, capital adequacy ratio of commercial banks has improved the level of the whole.However, the profitability of our country commercial banks is single, capital lack of endogenous sources, capital structure is single, too.Proportion of retained earnings and subsidiary capital is too low, the growth rate of capital don't keep up to the growth rate of assets, consumption of capital is too excessive, especially a substantial increase in the size of loans from the end 2008 to 2009, makes the decrease of commercial banks capital adequacy ratio, caused the state-owned commercial banks large waves of financing.The condition of the implementation of Basel II is not very good current, especially the measurement methods for credit risk, operational risk and market risk yet to be perfected. Meanwhile, although the release of Basel III have a little impact on China's banking industry temporary, but the long-term effects should not be overlooked. Therefore, improve the level of our country commercial banks capital adequacy ratio management is an important issue.This paper studies the theoretical basis and historical evolution of the regulatory capital adequacy ratio of commercial banks firstly. Secondly, reviewing the history and current situation of capital adequacy ratio of commercial bank management, and discussed the management of capital adequacy problems. Finally, analysising the main factors of the capital adequacy ratio management from micro and macro perspective. Microeconomic factors including the profitability of commercial banks, on a level of capital adequacy, risk management of commercial banks and financing scale form stock market. Macroeconomic factors including imperfect of market financing system,the economic cycle effect of capital regulation and so on. Finally, proposing the solutions to improve capital adequacy ratio of commercial bank management from micro and macro perspective.