Capital Adequacy Ratio Research Of Small And Medium-sized Commercial Banks Of China

Capital adequacy ratio (CAR) indicates the ratio of the capital and the risk-weighted assets of a bank under the requirement of the supervisory authority. It is not only the requisite capital quantity possessed by the bank but also the important criterion of measuring the adequacy of the capital and risk-precaution of the bank. Capital is the life of the modern commercial bank and the last line of defense to keep the public belief and prevent risk.In the recent years, small and medium-sized commercial banks become the important constitutions of Chinese financial system accompanied with the fast development of the national economy. However, the capital adequacy ratio of them is lower compared with national commercial banks, and has the trend of decreasing. Therefore, it is crucial to strengthen the management of capital adequacy ratio in order to improve the level of the business management and the risk management for the small and medium-sized commercial banks.This paper is composed of five parts. Firstly introduce the idea of selecting topic and study background, as well as the review of domestic and foreign scholars' references. Secondly, summarize the relevant concept and theory, including the definition of small and medium-sized commercial banks and capital adequacy ratio. Thirdly, analyze the status quo and problems in the CAR management of small and medium-sized commercial banks by theoretic and demonstration method. Then analyze the factors of influencing CAR of small and medium-sized commercial banks by using the data of 16 samples from 2006 to 2008. At last, bring forward the practical approach to enhance the CAR management of our small and medium-sized banks.