The Disquisition On The Efficiency Of Chinese And Foreign Commercial Banks

Competition is the surviving rule for commercial banks in the market economy, and it mainly depends on its performance. In fact, competition advantage is efficiency advantage and the proper strategy is to improve the relative efficiency of the competitors as possible. In China, the domestic commercial banks are the main body of its financial system, as well as the vitals of the economic performance. Since 2006, many foreign commercial banks have come into China where they have gradually occupied the market of the domestic commercial banks. Therefore, it is very important to improve efficiency of the domestic commercial banks in order to enhance its competency, and it is an essential requirement for China's entry into the WTO, which can make themselves commercial banks and internationalization, so as to ensure China's financial safety and soundness and to maintain the continuous and sustainable growth.There are 5 chapters in this paper:The first chapter is the leadin of this paper which mainly introduces the meaning of subject, the way of analysis and the innovation of this paper. The innovation includes analyzing the efficiency of foreign commercial banks and domestic commercial banks under the model of Data Envelopment Analysis, further more, new standard to evaluating the input and output is brought into this paper.The second chapter is the summary about the efficiency of commercial banks. First, it introduces the basic meanings of efficiency in economics; then, it introduces the way about how to evaluate the efficiency of commercial banks and particularizes the sort of efficiency of commercial banks including Scale efficiency, Scope efficiency and x-efficiency. Finally, it introduces the mathematic methods about how to analyzing the efficiency of commercial banks, meanwhile, it compares the nonparametric statistics to parametric statistics and chooses the DEA of nonparametric statistics as the mathematic method of analyzing the efficiency in this chapter.The third chapter is the demonstration about the efficiency of commercial banks. It mainly introduces the analyzing method of DEA under which the efficiencies of foreign commercial banks and domestic commercial banks are compared. On the base of the analyzing result, we find that the domestic commercial banks have a great gap with the foreign commercial banks, but also, the domestic commercial banks become more efficient gradually after comparing the database of 2004 and 2005.The fourth chapter is about the causes of the gap between foreign commercial banks and domestic commercial banks. First, it describes the actuality of competition between the foreign commercial banks and the domestic commercial banks nowadays; then, it gives some disadvantages of the domestic commercial banks such as the flaws in the management and lack of abilities to innovate and so on.The fifth chapter is the suggestions about how to improve the efficiency of the domestic commercial banks. 6 pieces of suggestions are given in this chapter, although there are a lot of problems for solving in domestic banking system. According to the problems of the domestic commercial banks, it gives some suggestions about how to improve the efficiency of the banks, such as improving the abilities of innovation reforming the framework of the banks and so on.