Asset Management Company, The Disposal Of State-owned Commercial Banks' Bad Assets

Banking industry deploys the capital in the financial system. It is very important to the economy development. But non-performing assets of banks is the key reason of causing financial crisis. There are a number of non-performing assets in state owned commercial banks of China. So disposing these non-performing assets is a very important question.Many countries set up asset management company to dispose non-performing assets. Asset Management Company is a special vehicle to disposing the non-performing assets of banks. It is an efficient. In 1999 four asset management companies founded in China. They bought the non-performing assets from the four state owned commercial banks and disposed. After several years the four asset management companies get good effect. But to avoid financial crisis, we must prevent producing new non-performing asset. For the length limited, this article didn't discuss how to prevent producing new non-performing assets.The frame of this article is as follows: the first chapter analyses the problems of banks' non-performing assets and the advantage of asset management company. This part mainly analyses the cause of producing non-performing assets of banks from information economics and the special cause of China. By comparison, the author point out the advantage of asset management company. The second chapter introduces the experience of other countries setting up asset management company and some revelations. The third chapter analyses the actuality of asset management company in China, introduces the effect and the present questions. The forth chapter discusses the main method of asset management company disposing the non-performing assets. The fifth chapter put forward some policy advice.