Private Bank, Development Research

Through recalling the path of private finance system in China, this article reveals the economic sense behind it: reconsidering the factors of central and local government, the importance of coexistence of a few kinds of finance property, the un-equilibrium of finance system and un-Walrasian equilibrium. Then it analyzes the demand and supply of private finance system with the theory of new system economics. It is important for the progressive reform of our state and the economic growth to develop private economy, which faces serious financial dilemma recently. As a kind of endogenic phenomenon of progressive reform, the reasons of financial dilemma lie in financial preference of nationalization and soft budget restriction of state-owned enterprises, asymmetric information and the rate which is not decided by market transaction, and the actual ownership-discrimination of stock market and bond market. At the same time, the performance of stock reform and increment reform of our finance system isn't evident. What's more, our financial industry is facing the challenge of foreign banks after joining WTO. It is crucial to develop private banks on a big scale. System demand leads to system supply. There are two typical cases of system supply of private finance. They are Tailong city-credit cooperative and Minsheng Bank of China. Both of them have brought forth new ideas which aim at property system and corporation management structure, and have established a effective excitation and restriction mechanism. But some defects also exist. It's prominent that corporation management structure should be made further normalization. Then how can we promote further development of our private banks? This article gives us some measures: First, effective mechanism of approving private banks to the market and private banks market withdraws should be founded. Second, private banks should establish a effective corporation management structure. Third, level of management administration should be improved. Forth, private banks should strengthen risk management. The last, government should set up a high efficient supervisory system, build up a deposit insurance system and a small and medium-sized enterprises' guarantee system so that health development of private banks can be ensured...