Corporation Governance--An Analysis On The Efficiency Loss And Information Asymmetry Of State-Owned Banks

Recently more state-owned commercial banks begin to carry out the shareholding reform with the purpose of preparing for the going public in the future. The corporate governance of banks therefore has undertaken great changes. As comparing with some small and medium size banks or foreign-invested banks, the operational efficiency of state-owned commercial banks is far from being satisfactory. This paper calculates and then makes an empirical contrast of values of operational efficiency of state-owned banks before and after going public, and concludes that the efficiency is quite undesirable.Actually in recent years many researches have been done on the comparison between the efficiency of state-owned banks and that of others, yet very few is concerning about the systems which have resulted in the efficiency difference. What are the problem's triggers and sources? This paper maintains that the information asymmetry is the most important reason for efficiency loss. The information asymmetry includes: information asymmetry between banks and depositors; information asymmetry between banks and borrowers; information asymmetry among departments of the banks and information asymmetry among the banks, shareholders, supervisors, loaners and other social organizations. The information asymmetry inside and outside the banks seriously twists the trade relationship between contractual parties and leads to the absence of property right ownership and loss of managerial efficiency.If the information asymmetry is the trigger of efficiency loss, what is the origin of the information asymmetry? This paper holds the view that the lack of corporate governance is the real source of information asymmetry. The aim of modern corporate governance is to solve the problem of agency created by the separation of corporate ownership and operation right, and the problem of efficiency loss caused by higher agency costs. The corporate governance of banks has some common features of corporations as well as certain specified industrial traits, such as shareholding structure, agency relationship and risks. The state-owned banks also have the problem of empty property right. The impact of 1997 Asian financial crisis and the current world economic crisis have urged the banking corporations to implement corporate governance, yet there are still more to improve. This paper has a thorough analysis of the prevailing problems, such as property right, legal person governance, organizational structure, personnel management and information releasing.The state-owned banks must further enhance the reform of corporate governance so as to reduce the information asymmetry and improve efficiency. The measures include: further promoting equity diversity reform; establishing scientific interior balancing system; establishing a scientific and efficient managerial matrix; establishing and perfecting information releasing system; strengthening interior impetus constraint system; perfecting risk controlling system and improving capacity of analyzing comprehensive information; improving exterior environment such as market, laws and regulations to reduce the information asymmetry. Through the empirical analysis and theoretical discussion, the author expects to provide the Chinese banking corporations with a more scientific and effective system corporate governance, which in return can lay a more solid foundation for the Chinese financial system.