The Analysis Of Capital Adequacy Ratio Management Of Commercial Bank In China

Capital adequacy ratio is the lifeblood of modern commercial banks. The important condition for commercial bank to survive and develop, effective maintenance of financial security is adequate capital. Capital adequacy ratio is the bank capital and risk weighted assets ratio that the banking supervisory authorities require banks to hold certain assets under the amount of capital that, is a comprehensive reflection of the level of bank management of the bank's capital, and also is the measure of the degree of risk prevention an important international generic indicators. "Basel Accord" (1988) provisions in banks which have international business must meet capital adequacy ratio of 8%.The next ten years, the Basel Committee conducted a series of amendments to the accord. The Basel Committee in 2001 issued the New Capital Accord framework which inherited the 1988 Basel Accord, represented the results of a series of regulatory principles on Capital adequacy; turned the single protocol binding, to the minimum capital adequacy ratio, external supervision and market discipline three common constraints. The process of Basel evolution reflects the process of the bank's capital adequacy ratio control theory. The Basel accord regulatory objectives reflect the international banking regulatory standards of capital adequacy and future trends. In the post-crisis era, the Basel Committee has revised the new Basel Accord, the Basel III. The purpose of Basel III:First, improve the international commercial banks to weather the financial risks; Second, to ensure that banks hold sufficient reserves to respond to possible future independent financial crisis and not depend on the government's rescue; Third, to avoid that bank bear a large number of business risks and liabilities in real estate loans, commercial loans, credit cards, and create a more stable financial system.For historical and practical reasons, China's commercial banks have been an awareness of the lack of capital management. With the development of economic and financial globalization, according to the commitments that China joins in the World Trade Organization, accelerate and deepen the financial system is an objective requirement to meet new challenges. Reform of the banking system is the focus of financial reform, including the disposal of bad assets, recapitalize banks, and improve corporate governance, joint-stock reform of banks and so on. Obvious problem is that too much emphasis on the balance of the management but the neglect of capital management. In China, rapid growth in financial institutions, there is a huge capital gap. Face serious challenges in the capital to add, all commercial banks and regulatory authorities need to work together to strengthen commercial bank capital management strategic sense, establish an effective monitoring system of capital, take the capital management as an important part of Bank of self-restraint. Therefore, the study to the current development of China's commercial banks with capital management is an important theoretical and practical significance.This thesis selected panel data from thirteen listed banks in China in 2004 and 2009 used the method by Allen N. Berger & Robert De Young (2008), constructed variable speed of partial-adjustment for empirical analysis. Analysis the relationship among multiple variables (LEVERAGE_RATIO,LN ASSET,P/B. MANUFACTURE,REALESTATELOAN,STDROA,BRD)with Capital adequacy ratio, provided new ideas and management methods to Capital adequacy management.This paper including:(1) Part one:Literature review. Review on the capital adequacy ratio of domestic and international management theory.(2) Part two:Commercial bank capital management theory. First introduced the theory on the basis of capital adequacy ratio; and then analyze on the three pillars of BaselⅡand BaselⅢ; Finally how BaselⅢmay impact on commercial banks in China.(3) Part three:Status of commercial bank capital and management. In this paper, used the Bank Annual Report 2004-2009 to analysis the state capital of commercial banks, and introduced China's capital adequacy ratio management development process, finally according to the Basel ProtocolⅢanalysis to China's capital management approach.(4) Part four:model analysis. This part Use the method by Allen N. Berger & Robert De Young (2008), constructed variable speed of partial-adjustment for empirical analysis, and finally analysis the relationship among multiple variables (LEVERAGE RATIO,LNASSET,P/B,MANUFACTURE,REALESTATELOAN,S TDROA,BRD) with Capital adequacy ratio. According to the empirical analysis, the non-performing loan ratio, leverage, real estate loans affect the size of the capitalIn this paper, results are as follows:(1)Capital adequacy ratio is positively related to P/B,REALESTATELOAN,MANUFACTURE. Because of underdeveloped capital markets, capital facilities and deployment relies primarily on commercial banks to carry out, commercial bank assets to the entire financial system accounts for about 70-80% of total assets, commercial bank assets and operations directly related to the whole Situation State of the national economy. Bank credit in the event of certain changes in the domestic real estate market, there will be intense reflection.(2) Capital adequacy ratio is negatively related to LNASSET, BRD, and LEVERAGE RATIO.By empirical analysis, the commercial bank capital adequacy ratio of effective management can take the following three measures:non-performing loan ratio of commercial banks to improve; to improve supervision of commercial bank leverage ratio; control the size of real estate loans.