A Study On The Development Of Capital Adequacy Regulation Of China's Banking Industry

The banking industry of China has made a great breakthrough achievement in reform that enhances the comprehensive competitiveness. However, there is still a big gap comparing with the advanced countries on the risk control and pricing. As the RMB service is widely open to foreign banks at the end of last year, the domestic bank industry would suffer a great challenge. Beginning in January 1st, 2007, the new Basel Accord is effective in the G10 countries. Although, the Basel Accord is not the international law,its core concept of risk management represents the developing trend of international banking regulation and supervision. As a member of international settlement bank, the effective Basel Accord must be one of the basic benchmarks and principals of supervision authority's regulation to internal commercial banks, and this would make the capital requirement regulation which regards risk control as the core content become a necessary trend.This paper argues the issue on development of capital requirement regulation. The first chapter presents the background and meaning of the research and introduces the related research. In the second chapter, the paper indicates the theory on capital adequacy regulation and new concept of the new Basel Accord about the capital adequacy regulation which is the theoretical basement of this research. The third chapter compares the situation of bank capital adequacy regulation round 2004 in China which begins with the history of our country's capital adequacy regulation, and presents the existing problem. In the forth chapter, the paper supplys a positive analysis on the influence of the capital adequency regulation to the banks operation efficiency using the factor analysis, and then, the paper analyses the effects of capital adequacy regulation to the macro-economy using the regressive analysis. The last chapter suggests how to develop capital adequacy regulation in our country.