A Study Of The Disposal Of The Non-performing Assets Of Our Country's Commercial Banks

As the core of China's economy and finance, the operation of Banking is critical to China's economy development. But the non-performing assets(hereinafter referred to as NPA) within the banking system have always been an important financial safety hazard, its existence created a major threat to the operating of China's Banking. In this paper, I made a general theoretical analysis about NPA firstly, to explore the deep reasons about the formation of NPA. It not only included the external factors, like market environment and government, but also included the banks'factors. Then this paper analyzed the harm caused by NPA and proved the disposal motivation by mathematical analysis, demonstrated the necessity of disposing the NPA.So how to deal with the NPA is the most suitable? Should it be disposed by banks themselves or by the external force? This paper used the empirical method and it is concluded that the Assets management company (hereinafter referred to as AMC) should be established to dispose the NPA. As for its performance, it's divided into two phases, that's the Policy-oriented NPA disposal stage and commercial NPA disposal stage. This paper summarized the performance and evaluated the contribution to economic development.However, it's undeniable that the AMC exists some problems in disposing of the NPA, such as the difficulty of making price, the imperfection of the law and the underdevelopment of the capital market. Then the advanced experiences of disposing the NPA of foreign countries proved the correctness of establishing the AMC, which is taken by our country. If these problems can't be solved, the commercialization of the AMC will be affected definitely. So at the end of this paper the corresponding solutions were putted forward, such as accelerating the commercialization of AMC, establishing the pricing system of NPA, improving the laws, cultivating a good credit environment and giving more loans to SME. Only by these efforts can improve the efficiency of disposing the NPA.