Research On Precautions Against Moral Hazard Of Junior Managers In SOBs

In various managers of the Stated-owned Commercial Banks(SOBs), the principal knows little about the junior managers for they are the ultimate tache of the principal-agent chain, but the possibility of the moral hazard is maximal, So they should be supervised and restricted strictly. On the contrary, the absence of the management and supervisal has led the junior managers to crime frequently. At the same time, looking into the current circumstance: On one hand, the organization frame adjustment that follows hard after the property right system's reform of the SOBs will cause renewed power distribution, and the asymmetric situation of the information is improving. On the other hand, the organization structure which is gradually flatting in the SOBs enhances the supervisal and restriction to junior managers, and the change will cause positive influence for preventing moral hazard of junior managers besides reducing their benefit. So the task of preventing moral hazard is more difficult.Because of this, the paper analyzes the precautions against moral hazard of junior managers in SOBs. According to the current research, the paper carries through risk identification of junior managers keeping to the process of risk management. And the moral hazard of junior managers could be divided into operation risk and management risk. After this, the paper analyzes the cause of formation by the principal-agent theory. There are such reasons: exterior factors and inner factors besides three aspects: property right problem, operation risk and management risk. And based on analysis, we build the static principal-agent model against moral hazard with a view to motivate and restrict the daily management of junior managers by encouragement and punishment.Based on the principal-agent analysis, the paper ultimately set up the precaution mechanism against moral hazard of junior managers to solve the property right problem, operation risk and management risk: Improving the principal-agent connection between the principal and junior managers; building the one against operation risk and management risk based on the static principal-agent model; relatively affiliated mechanism, including the affiliated reform of profession credit system aimed at junior managers and the one of supervisal and restriction mechanismaimed at the four SOBs. From the academic perspective and possibility of practice, thepaper expect to solving the problem of SOBs' property right reform and moral hazardof junior managers following the organization structure adjustment.