Study On Supervision Of Problem Bank

Finance is in the key position of our national economy. The asymmetry of information, the negative effect of finance on the society and the frequently happening of bank bankruptcy and financial dangers make finance a special industry with high risk. According to the agreement of our country entering WTO, the bank system of our country has been completely opened to overseas-funded enterprise by the end of 2006. Our commercial banks will suffer more fierce competition. With the intensification of competition, the problem bank will appear undoubtedly. Therefore, it will be a new challenge to manage the problem bank effectively.The paper mainly focuses on the design of some measures on how to manage and deal with problem bank. It will be the key part of bank supervision system to regulate problem bank. After years of expedition and practicing, foreign banks have formed an relatively systematic, integral and scientific system and they work out an good procedure from the identification of early problem bank, the evaluation and early warning of the risk to the response and handling when problem bank appears. We start late in research of the field, some problems still exist in the identification of problem bank and handling. There is a big gap for us to be in the line with international practice, which severely affects the efficiency and public reputation of bank supervision. So the research on problem bank handling will make great difference to improve the validity of our bank supervision and guaranteen the steadily running of our bank system.The paper aims at offering a helpful reference to improve our bank supervision system through the research on the handling theory and practice of problem banks at home and abroad. Based on the advanced experience of foreign bank supervision authorities, in the field of manage practice, the article applies the method of branch evaluation and offers an easy but practical tool for the identification of evaluating the risk of branch establishment after the empirical analysis of some cases; in the field of policy mechanism, there is a notion that we should update our ideas of supervision, strengthen the restriction to the supervisors, build the standard bank supervision procedures, regulate the banks separately and so on by making use of problem managing theory. On one hand, we must complete the system of early identification of problem bank, build advanced evaluation and risk warning system to improve the probability and accuracy of early identification, on the other hand, we should create some new ideas on the management, master and enrich the methods of handling problem bank, improve the success rate of treatment with the help of standard proposal, then we can remove the risk from problem bank and promote the healthy development of our finance market.