"basel Ii" Capital Management Research With The Chinese Commercial Banks

Capital is a constraint for the operation and development of commercial banks .This decided the central position of Capital Management in modern banking management .The allocation of financial resources, business expansion and contraction of commercial banks are based on Capital Management .As the risk must be covered by capital , the capital quantity and structure of banks have close ties with the banks' risk management and we should combine the both.By the end of 2006 Chinese banking industry has opened fully. In line with the international market, Chinese banks must comply with the "rules of the game" of international banking industry, particularly the "International Convergence of Capital Measurement and Capital Standards: a Revised Framework". At present, compared with the developed countries, the financial system of many developing countries is not perfect. The basic conditions for the implementation of the New Basel Accord which many developing countries are lacked are as follows: a good credit rating system, perfected capital market and so on. As the world's largest developing countries, China couldn't implement the New Basel Accord .The reason is that the reform of the Chinese financial system has not been completed.This paper is mainly about the New Basel Capital Accord and the Capital Management of Chinese commercial banks .By the comparison between the new and old Basel Capital Accord ,we found the trends of Capital Management from the capital adequacy ratio for a single principle to the combination of capital management and risk management .After reviewing the history of the banks' Capital Management of China , we found the deficiencies of the domestic banks' capital management from the actual operating management and the management approach of the domestic banks. Then we analysis the impaction of the implementation of the new Basel Capital Accord in China and find that it will not improve what we have faced but make them worse. At last we propose some reform measures for the actual situation of Chinese banks .We should set up a modern management mechanism of the banks' capital, improve the banks' capital structure, enhance the capital allocation, improve the credit rating system, enhance the disclosure of information to strengthen the capital regulatory and construct a comprehensive risk management system and so on. By these, we can combine with both the capital management and the risk management to improve the capabilities of Chinese banks' capital management and enhance the overall strength of Chinese banking industry.