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Study Of The Legal Issues Of Capital Adequacy Ratio Of Commercial Bank Regulation

Posted on:2011-04-24Degree:MasterType:Thesis
Country:ChinaCandidate:J L HuangFull Text:PDF
GTID:2206360305479355Subject:Economic Law
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Commercial banking supervision is in the process of development, and capital adequacy ratio of commercial banks has been the regulation of the focus of banking supervision. Commercial bank's capital is quite important for the stable operation of banks of great significance. Bank's capital, from an economic sense, refers to the commercial bank balance sheet of the owner of the equity component. commercial bank capital adequacy is the cornerstone to ensure stable operation of banks, and the necessary condition of prudent management. From a legal point of view , bank capital is the property of the main commercial banks, not including property owned by depositors. The meaning of bank capital is to protect the interests of bank depositors and other clients. In both "Basel Capital Accord" and "New Basel Capital Accord," the bank's capital adequacy regulation is provided. Most countries in the world have adopted the provisions of the Basel Committee's 8% capital adequacy ratio requirements. Some countries have different standards which are different from 8%. China's banking industry goes according with"Basel Capital Accord", which means that the capital adequacy ratio requirement is 8%, and core capital adequacy ratio requirement is 4%. In December 2009, CBRC passed "guidelines of supervision and regulation of capital adequacy ratio of commercial bank ". The guidelines further emphasized in assessing the commercial bank capital. In addition to paying attention to credit risk, market risk and operational risk, the banks and authority should also pay attention to the other of the substantive risk. What is more, commercial banks should also optimize corporate governance structure. CBRC establishes different regulatory capital and different trigger-ratios for each bank, when the commercial bank's capital adequacy ratio below the trigger ratio, commercial banks should be in the development of new capital plan submitted to the CBRC. The guidelines also proposed the creation of specialized regulatory capital adequacy ratio - capital adequacy monitoring committee. These requirements mean that the regulation of capital adequacy ratio goes from quantity- supervision to quality-supervision. But because it is not soon since the introduction of guidelines, banks'internal governance structure still can not meet the requirements, and our current regulatory capital adequacy ratio of commercial banks have more problems. First, the regulation of CBRC gives to capital adequacy ratio of banks is not flexible enough; Secondly, with our complementary way to increase bank capital, there are some difficult for CBRC to judge the quality of capital adequacy. Some commercial banks improve capital adequacy ratio of regulatory capital by means of securitization of assets. It means that the banks can improve the capital adequacy ratio without increasing the assets; what is more, bank Capital adequacy does not mean that the operation of banks is healthy? In Bahrain, a month before the bank failures, capital was adequate , and was not considered at risk. In the regulation of capital adequacy ratio , CBRC can learn from international experience, such as the Basel "New Capital Accord", the United States, Germany, Russia and other countries experience, especially in the stress test, reserve system establishment and determination of the capital adequacy standards. In order to improve the supervision of bank capital adequacy ratio of China's legal framework, the following aspects should be perfect: the index to evaluate the capital adequacy ratio, flexible system and regulatory system. Also, enhancing the bank's own binding and binding on the market, introducing of deposit insurance system, improving the stress testing system are quite important .
Keywords/Search Tags:commercial bank, regulation of capital adequacy ratio, Basel Capital Accord
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