Research On Development Of China Community Banks

One of the major characteristics of the U.S. banking system is that it consists of a large number of community banks which are closely related to local communities. The multitudinous community banks, coexisted with large banks, have met the diverse needs of businesses of all kinds and sizes, and satisfied consumers with different needs and preferences, thus served the U.S. economy well. Based on the theory of financial intermediary, information economies, and theory of money & banking, by adopting the way of the combination of qualitative and quantitative analysis, comparison study, the paper analyzed the existence mechanism and comparative advantages of the U.S. community banks, revealed the internal relations between that kind of financial intermediary and the economic development, probed into the competitive ability and future development trend of community banks under the background of ongoing radical changes in financial industry, and excavated experiences of the development of U.S. community banks to be drawn on by China's banking system for reform in next period.On the basis of considering the foreign and domestic existing research this paper firstly made a concept of the community band with China's special features. In China, the research of community banks is just at the beginning stage, most of which are barely about the concept and the characters, it is in lack of the systematic research. Secondly introduce the history and the development of America community banks. The paper then analyzed the comparative advantages, especially advantages on relationship lending of community banks. Proceeding from the view that financial transactions are information-based, the paper revealed that the competitive ability of community banks in engaging in relationship lending was originated from their advantages on links including collection, transfer and use of soft information, which as well was related to these banks' characteristics in organizational and ownership structure. The actual operation performance demonstrated that, through way of relationship lending, the community banks successfully controlled the risks. Thirdly the paper analyzed practical significance of developing community bank linking with realities in China. Finally, the paper explored how to draw on the relevant experiences. From the perspective of financial function paradigm, the author put forward that the introduction of community banks improved our country's financial structure marginally. The next, risk control would be an important task in the course of developing community banks in our country, and the key to control risks is to effectively implement internal control, set up perfect supervision system, and create favorable external environment.