Research On Impact Of Foreign Investors' Entry To Chinese Commercial Banks

There's no doubt that commercial banking is the core system in the financial industry. The existing reform of the commercial banking has exerted a prominent and key impact on the economic development and social stability. Chinese scholars have commonly draw the conclusion that for a single Chinese commercial bank, it is not enough to depend on its self-strive in order to become one of the outstanding commercial banks in the world which set the standard for the whole industry. It also needs the exterior power to push and accelerate the process of the reform. And as what we see today, introducing the foreign strategic investors may be the best option to take such kind of responsibility according to their own feature. In the recent years, the pace of foreign investor's entry into Chinese commercial banks is running faster and faster along with the fact of expeditious development and opening banking industry. Introducing foreign investor has become the trend for the commercial banks in our country, which is causing deeper and deeper impact on the banking performance of Chinese commercial banks.The thesis analyzes the foreign investor' entry impact on Chinese commercial banks' performance through three different channels: capital adequacy, management and corporate governance. The impact through corporate governance is the key analysis. Remarkable positive relationship is discovered between equity share of foreign investors and performance of Chinese commercial banks by using panel data. The thesis also takes the empirical test for the channels by regression models, the results of which have strongly proved their positive effects.Introducing foreign investor is one of the effective ways when dealing with commercial bank's reform in our country. Meanwhile, we need to keep an eye on the possible cultural conflicts and the problems of financial monitoring which may be brought in by the foreign investors. Therefore, we need to fully utilize the function of corporate governance, try everything to harmonize the different culture, strengthen the financial monitor and make full use of foreign investors' advantages to improve the Chinese commercial banks' performance.