China's Commercial Banks' Capital Adequacy Ratio Management Research

Capital is the base of commercial banks and the last line of defense when other measures against risk invalidated. Capital adequacy ratio management is significant during the course of commercial bank's operation. The "International Convergence of Capital Measurement and Capital Standards: a Revised Framework" published in June 2004, commonly known as the New Basel Capital Accord, reflects the new development of capital adequacy ratio management in international bank industry.Because of many historical reasons, national capital adequacy ratio management dropped behind international bank industry: capital adequacy ratio is still very low, capital structure is irrationality and unefficient. The "Measures for Management of Commercial banks Capital adequacy ratio" issued in 2004, established clear standards of bank capital management and confirmed the deadline of achievement is 1st Jan 2007. During this transitional period, increasing capital amount and improving capital structure become urgent affairs.This dissertation started from the functions of commercial bank's capital, firstly, set forth the needs of strengthen capital adequacy ratio management and new development of international capital adequacy ratio management. Secondly, discussed calculating means of capital adequacy ratio and the approaches of maintaining sound capital adequacy ratio. Thirdly, we analyzed national capital adequacy ratio management status in quo and influence factors, from three aspects of capital amount, structure and efficiency. Finally, we put forward some policy advices according to our practice.