Bilateral Commercial Banks' Bad Loan Problems. Comparative Study

There are massive non-performing loans in China's and Japan's banking industry. Non-performing loans' proportion is an important index to valuate banking risks, however, stable banking system is critical to the whole financial industrial stability. Substantive non-performing loans in banking industry have become one of the hottest issues of the whole world. China and Japan share the similar highly-developing experiences, so Japan's past relevant experiences are significant to China economic development.The thesis builds comparative system, and analyzes China's and Japan's historic conditions and economic circumstances, and finds similarities and differences between them, and formulates and identifies the laws of non-performing. The author analyzes the whole set of Japan's related policies, measures and final effects, and reviews China's settlements, and suggests that the government should draw a lesson from Japan, and takes optimum measures to settle non-performing loans at the optimum time. Meantime, additional actions should be taken to prohibit newly non-performing occurrence. The government should emphasize actions' consistency and coordination, and relevant parties allocate loans reasonably to avoid over-invested occurrence, bubble economy, and banks' crisis. The thesis thinks founding related financial supervisory, improving related laws and regulations, and enhancing supervision of illegal actions is necessary to create a sound macro-financial environment. Especially, banks with public shares should avoid the problems that restrictive system is weakened due to cross-held equity between corporations and banks in Japan. At present, China must stick firmly to improving banking anti-non-performing loans system, and upgrade China's banking competitiveness in the economic globalization.