Cause Analysis And Countermeasures Of China's State-owned Commercial Banks' Bad Assets

With the rapid development, the state-owned commercial banks ofChina have accumulated huge NPLs(Non-Performing Loans).And now, a lotof performing loans change into NPLs , the total amount of NPLs is largerthan before, the quality of NPLs becomes worse. These threaten the financialsafety and the stabilization of the national economy. Therefore, it is veryimportant to prevent and dispose NPLs for the state-owned commercialbanks.In order to prevent and dispose NPLs in the state-owned commercialbanks, we should learn the experience from other countries. The US, Koreaand Poland are selected as research subjects. There are a lot of skills andtechnologies for reference.To prevent NPLs. There are many causes of NPLs in the state-ownedcommercial banks, so the measures which prevent NPLs should be discussedin many aspects. The measures include: developing the capital market towiden the financing fields for enterprises, deepening the reform, improvingbusiness of banks and enterprises, enhancing supervisal.To dispose NPLs. It is the basic principle of disposing NPLs tomaximize the value of NPLs. That concerns how to dispose NPLs in time andin right occasion, how to improve the management of NPLs. The methods andtechnologies to dispose NPLs mainly include the following matters:cancelafter verification, reconstruction, debt-to-equity swap, asset backed securities,to set up AMC, to sell NPLs, to lease the assets and so on. And furtherresearch has been done in AMC, debt-to-equity swap and asset backedsecurities. Many relevant factors are also discussed in this dissertation, suchas accounting policies, laws and supervisal.It needs Institutional Innovation, Technological Innovation and thework in the all round way to prevent and dispose the NPLs effectively.