The Vulnerability Of The Banking System In China

Researches on Chinese banking system vulnerability which is affected by historical and reality factors have gained attention of scholars since African financial crisis. The development of the theory both on bank vulnerability and corporation governance provide theoretical evidence for its analysis from the aspect of banking company governance. With more and more commercial banks going public and geared to international standards, only the banks qualifying modern company governance can fit in the varying financial market. Because of the particularity of banking corporation, study on banking system vulnerability from the aspect of particular governance mechanism of commercial banks has become the focus of researches.The paper affirms the achievement of Chinese bank non-tradable shares reform, proves positive effect of dependent director system on governing banks and reducing bank vulnerability, takes a special attitude towards board of supervisors in coporation governance, criticizes negative effects in reform,and confirms the security of state-owned commercial banks. At last the paper suggests adopting positive controllable share structure, furthur improving the status of dependent director in corporation governance, establishing mature financial market at last improving security of the whole bank industry. This paper starts with commercial bank corporation governance factors, that is ,share structure and board of direction ,analyses their effects on bank operation, governance target , risk level and so on, then explore their outcome critically. The author chooses ownership structure factors model and credit expansion model to analyse the factors which effect share structure and the following results. The paper draws on the experience of predecessors'indexes , measures the effect of every financial index on bank vulnerability level ,at last marks vulnerability. Then according to the comparison of pool model among twelve public commercial banks, author choose cross-sectional model and time fixed effect model to analysis how companies'governance index in different banks and different years affect bank vulnerability . The paper does empirical study on the deliberation of previous papers about bank governance.The full text of the paper through,it confirm the success of reform on on-tradable shares vulnerability of the bank level is reduced by Ownership concentration lesson .confirm the positive of independent director system in corporation governance, suspect the function of supervisory board in corporation governance. With the deepening of reform, the banking safety levels is rising. Finally, the paper put forward the measures and suggestions to settle the problems by rational structure and independent director system to building the mature financial markets.