Influence Of Gaming With Essential Elements In A Merger On Chinese Bank Industry Development Strategy

Today merging in the bank industry grows increasingly intense in China. Leading Chinese banks including large state-owned commercial banks such as Industrial and Commercial Bank of China, and share holding commercial banks such as China Merchants Bank, are both viewing the business from a global perspective, while achieving their business expansion domestically. The essay aimed to apply the Game Theory combined with the practice of international bank merging, and briefly analyze the key elements in a merge in the bank industry, such as manager behavior, stock holder behavior, and government behavior in a variety of hypothetical situation through elaboration of the gaming behavior in bank merging and sharing some thoughts around the topic. The study also elaborated on the trend of merging in the bank industry both internationally and domestically, and pointed out that in the future, bank merges in the Chinese bank industry will adopt the "value-maximization" orientation, the basis of market-driven system, and be aligned with the megatrend of internationalization, with the completion and perfection of Chinese laws and regulations and appropriate supervision being in place.The essay examined the system and process of bank merging, and the final conclusion included four sections: the first section contained illustration on the model and process of merging; the second section consisted of analysis on the trend of international bank industry development and a description of the market and legal environment of the Chinese bank industry; a brief introduction to the behaviors of gaming can be found in the third section, with a presentation of several key elements of bank merging and an analysis on the influence and effects of gaming behavior on bank merging; in the fourth section the author analyzed the key elements of gaming models and derived the suitable strategic options for merging in the Chinese bank industry under the circumstances of market and legal environment of the Chinese bank industry.In the last place, a conclusion was made on the strategy of merging and development of the Chinese bank industry on the basis of analysis of the circumstances of three key elements of gaming, which may affect bank merging, combined with the circumstances of market and legal environment of the Chinese bank industry: reinforcing the position of marketing over other elements of bank merging; transition of the government role in bank merging; enhancing bank managers' level of decision making in bank merging and their initiative; emphasis of the prerequisite that all bank merging must be under effective and powerful supervision throughout.