Global Banking M & A Wave, And Countermeasures Of China's Banking Sector

Since the 1980's, the globalization and integration of the world economy have set the stage for the dramatic acceleration in bank merger and acquisition. By using comparative methodology, this essay discusses the historical change of the world's bank merger wave. It also delves into the costs and effects of bank M & A that is sweeping across the world and its influence on China's economy and banking industry.On a micro level, the rationale of bank M & A lies in economies of scale, which is objectively limited by techniques, technology and management, and it also lies in reducing relevant costs, diversifying operation risks, etc. As a means of diversifying individual bank portfolio, the global bank M & A secures the economic interests of the banking industry and guarantees the stability of banking industry as well as strengthens its international competitiveness. On the other hand, bank M& A has its limitations and risks. Effective risk control is essential in bank consolidation.By a transition from the central-planning economy to a market one, China's financial market takes its transitional stage. Bank M & A in China is under the situation of gradually decreasing administrative intervention along with the gradually aggrandizing of market forces.This paper takes the position that the market-oriented or the so-called market-impetus merger is the ideal stage, for it is the best way of distributing resources. It also holds on the standpoint that the process of marketalization of bank M & A should be taken in China. Government should also help perfect the market economy and ensure the equality of market competition. Capital reconstruction and financial holding companies are best solutions to China's banking industry .