Research On Market Discipline Effects Of The Banking System In China

The finance is the modern economy core, the world economic development reality indicated fully that the financial development has the formidable propelling force, the influence and the action to the economic growth. If compares with the finance the modern economy royal crown, then the banking industry takes financial the main body and the core, is on the royal crown the most dazzling pearl. But looks like a coin both sides, during impetus economy swift growth, once the financial industry presents the crisis and the confusion, lives the negative influence which to the social economy and the resident brings is also exceptionally huge.As the guard of the financial crisis, various countries strengthened generally to the financial organ management by supervision, implements the strict control by the admittance system, the competition restraint, the service instruction and so on to come the standard banking industry operation, urges its steady management, the circumvention risk. Simultaneously the banking industry itself also strengthened its own audit, the surveillance, the mechanism of self-restraint, weakens and eliminates the risk as far as possible in the bank interior. The market strength to the banking industry is neglected as steady management's influence. Along with financial crisis's unceasing occurrence, the official supervision was known unceasingly with the self-supervision's flaw that restrains with the market strength supervises the bank to bring to people's attention more and more .In 2004 New Basel Capital Accord was clear list the market discipline as the banking supervision "three pillars", gave highly the affirmation to the market discipline in the financial supervision's function. This article is studies in our country economic reform special advancement using the market discipline theory the banking industry market restraint effect whether to exist, namely market strength to banking industry's management and operation whether can exert the influence. If the market restraint effect existence that exists the intensity has in a big way, to all banks whether to have the similar restraint strength. Here market's strengths are mainly refer to the bank some benefit related main body, like depositor, creditor, shareholder and so on.This article first gives a high category definition to market discipline , how the bank each benefit counterparts to affect the bank operating decisions to the market in the function machine to make the thorough discussion, explained the market discipline's flaw, then introduce the market restraint before the official supervision and the introduction, has made the contrast, introduced the effective market restraint should have three big characteristics, provided a theory platform for the following research.Then using the panel data of 12 bank between 2000-2005 in China, establishes the individual fixed effect panel data model, through estimated that the bank deposit rate of increment the response which makes to the bank risk change, namely examines our country high risk the bank whether to have absorbed less deposits, the real diagnosis examined our country Banking industry's market discipline effects.The result indicated that banks in China have the market discipline effect, but the overall performance is weak. Moreover this kind of restraint effect has the big difference to the different property rights structure's bank. The concrete manifestation is weak for the market binding force regarding four big state-owned banks, but has the strong binding force to other joint stock system bank. This possibly is because the government caused the country to bank excessively many interventions and the protective measures to provide the recessive state credit guarantee in disguised form for the state-owned bank, thus caused our country market to restrain to the bank the watch-dog function obtains has suppressed. In view of this kind of situation, the author to our country finance security system construction, the banking industry reformed, the expansion finance surveillance channel to put forward oneself some policy proposal.