Small And Medium-sized Commercial Banks To The Financial Crisis Early Warning Mechanism

The past ten years is the right time for China to build its modern financial system, and to develop its financial industry rapidly. In this period, accompanied by the appearances of many small-and medium-sized commercial banks, the operation and management problems of these banks have attracted the whole society's attention. The main force of the Chinese small-and medium-sized commercial bank, that is the city commercial bank (CCB) has gone through for almost ten years. During the past ten years, the CCBs have primarily solved the risks that was accumulated for many years, and played a very important role in serving local economies. As the financial system reformation goes more further, the CCBs have no systematic advantages any more, meanwhile, the disadvantages like small-sized, weak bases, lack of capital and complex competition ability, especial the profit ability has became more and more obvious. According to the statistics offered by the China Banking Regulatory Commission (CBRC),by the end of 2004. 11, the total assets of all the CCBs in China is 1.9 trillion, and the equity is 693 billion. According to the five-category classification, the balance of non-performing loans (NPL) is 9.7%, and the average capital adequacy ratio is 2.7%, while the average total assets is less than 0. 1%, which is only 1/12 of American average level. It is even less than some developing countries like India, Malaysia and so on. The fiscal problems of small-and medium-sized commercial bank are becoming a restriction for their future development. And also the fiscal risk manifests, the potential fiscal crisis increases day by day.Just because of this background and reason, I planed to combine the economic and financial theories, which I've learnt during my postgraduate course, with my working experience of the commercial bank's operation and management, to explore how to establish the fiscal crisis precautionarymechanism system for Chinese small-and medium-sized commercial banks. The whole thesis, with 30000 words, can be divided into four chapters.Chapter One: This chapter is mainly based on the practice of Chinese financial reformation and development. The thesis firstly made a definition of small-and medium-sized commercial banks in theory. Then it generalized the Chinese small-and medium-sized commercial banks' functions and general operating conditions during the society economic development objectively and generally. And then it analyzed the definition of the fiscal crisis, performance and its harm to the social economy.Chapter two. This chapter mainly discovered the premises and methodologies in establishing the precaution mechanism for financial crisis of small-and medium-sized commercial banks. Meanwhile, in summarizing and analyzing the current situation of applying the precautionary mechanism for financial crisis of commercial banks in several countries, we summarized some enlightenment of such mechanism for China. Moreover, we retrospect and analyzed the history and problems in establishing such precautionary mechanism in our country.Chapter three. With regard to the historical pace of reforming and developing the small-and medium-sized commercial banks, we objectively analyzed and discussed the appearance and reasons for the commercial banks' financial crisis both internally and externally on an all-around basis.Chapter four. This chapter is the key point of this article. In this chapter I firstly analyzed and discussed the foundation and effect of the establishment of the precautionary mechanism for commercial banks' financial crisis in theory. Secondly, with regard to the current situation of the operation and management of the small-and medium-sized commercial banks, we discovered the method in selecting the target index for the precautionary mechanism and the quantitative analysis and evaluation method. Finally, in detailed examples, we discovered several problems in applying the quantitative analysis and evaluation method of precautionary mechanism which need to be paid special attention.This article through the theoretical discovery of the financial crisis of the medium and small commercial banks, compared the composition of the foreign precautionary mechanism for financial crisis of medium and small commercial banks;with regard to the internal and external reason of financial crisis of medium and small commercial banks, approached to provide a detailed methodology in establishing the precautionary mechanism for financial crisis. However, in considering the limitation of my theoretical knowledge and deficiency of practical experience, there must be some flaws and problems in this article. Any comment and advice from honorable judges and teachers is highly appreciated. Careful revision and persistent exploration will follow closely. I will take dedicate all my intelligence and capability, to the orderly, efficient and healthy development of Chinese small-and medium-sized commercial banks.