The Contract Explanation Of The Reform Of The State-owned Commercial Banks

This article is intended to use contract theory to explain the evolution of changes in the reform of state-owned commercial banks. There are two Problems :The reason for the reform of state-owned commercial banks;Second, the reason of the introduction of foreign strategic investors .Firstly, the development of the banking sector in China, the history and evolution of the reform process briefly reviewed. Second is a summary of the issues related to banking reform, mainly from the issue, Cause analysis and policy recommendations to describe several aspects.The theoretical framework is described in Chapter III. We do not know that Whatis bank, the Bank border and the bank's right to the monetary and financial arrangements, mainstream economics is too. Only the emergence of new institutional economics and transactions cost paradigm, the organization has to understand. Since banks have been interpreted as an organization, and the similarities and differences it has different with businesses in general? So. Tirole think they are same.Banks and enterprises that are financed by capital built up with the owners and creditors. Therefore, banks and businesses in general is no difference. And Javier. Frakes and so. Charles. Roger content from the perspective of the definition of the banking business. that "a major bank is engaged in soliciting deposits from the public and lending institutions."Academic tradition, bank earlier in the same general business analysis is not done to distinguish between master monetarist Milton Friedman. In classic literature "rate control" article, the analysis of the banking act is the start of price control theory. Its implicit assumption is that the banks are seeking to maximize profits.In this paper, the bank is still regarded as a special organization. In accordance with the understanding from the general to the particular,we first in general, understand the enterprise level, then analyze the unique features of the banks.Bank borrowings were the main function is to the credit needs of the deposit portfolio into lending portfolio.Banks have to face many risks : liquidity risk, credit risk, interest rate risk. And so on. Therefore, the banks, as an organization, the greatest demand is for the risk of a high degree of sensitivity and professionalism in handling this matter. Bank bankers in the contract, is to deal with future uncertainties.In the state-owned commercial banks, the general staff did not seem so special. The material is the biggest change in the capital provider is no longer personal, but the state . The human capital of state-owned commercial banks by the government's unified plan. Not only ordinary employees, and even high-level managers also appointed by the government and arrangements. Party committees in the banking personnel selection, which plays a critical role in business decisions.The state-owned enterprises owned banks have such special effects, but what good does it do? A high proportion of non-performing assets and low proportion of profitability. In the past, there is a very serious problem -- the screening of staff, especially managers.As mentioned above, the bankers inadequate human capital, physical capital is relatively too many .There is a assumption that in the state-owned economic units to maximize rent. Clearly, the government has to adjust its choice of material capital. This is the big 1998 2000-31 drastic reduction in the branch.After the success of taking part in the WTO in 2001, the new constraints began play a role. It is foreign-funded financial institutions in the next few years will gradually come, increased competition in the main state-owned banks in the original contract market viability test. New constraint is pressure, and opportunities. This is the introduction of strategic investors introduced.Here also tells that the introduction of strategic investors is a process that the financial injection stage, the separation of bad assets and so on . Understanding that the practice of reducing information asymmetry between foreign strategic investors is very important! In addition, the article repeatedly "to introduce strategic investors," "introduction" to refer to the outside, but why? The answer is very simple, but let us very prestige. There is no domestic bankers.From the analysis of the contract process, we can also see that some terminology has its own unique meaning. For example, state-owned commercial banks and the financial security are in itself misleading.Throughout the text is also very obvious flaws and shortcomings : No in-depth analysis of corporate governance based on the basic theoretical framework; Using the same theoretical analysis has not speculated the Impact of introduction of strategic investors; Documents, data assessment also seemed sloppy; To simplify the problem.,The concept of government is also avoided to discuss; AND SO ON.