China's Commercial Banking System Innovation Research, And Institutional Risk Control

Owing to the institutional innovation in commercial banks accompanied by the reform of economic institution, national economy and financial industry of china have been booming, which has greatly promote the development of productivity. However, commercial bank's risk has accumulated and prevented national economy from further development as the economic reform is deepened progressively. After theoretical probe of the past several years, the theory circle has agreed that commercial bank's risk of loan has been caused by the imperfection of institution. According to new institution economics and information economics, the author has a detailed analyses of commercial banks' institution innovation in the western developed countries from the angle of controlling the institution risk, and concludes that institution innovation in commercial banks results from controlling institution risk.In order to analyses of the various institution models of commercial banks, the author has a comparative discusses about it by compounding commercial banks' property rights' institution with business management institution. On the other hand, it suggests some concrete institution model of business management is reasonable logically.The author dates back to the history of commercial banks' institutional changes in China and summarizes the current characteristics and cause of institution risk in them. At last, taking above analyses into account, the author thinks that it is imperative to establish modern commercial banks' institution with the core of modern property rights' institution. At the same time, the author puts forward a series of measures for controlling institution risk as follows: firstly, establish modern property rights' institution and improve legal entity governance structure; secondly, establish financial controlling corporation and carry out mixed business operation; thirdly, innovate commercial banks' supervision institution, establishing mixed business supervision model with the characteristics of functional supervision; finally, perfect social credit system in order to strengthen construction of external environment of commercial banks' institution.