A Study Of Capital Adequacy Ratio Management Of City Commercial Banks In China

With China’s banking reform movement gets deeper, City Commercial Banks as the third echelons of China’s banking industry has been developed rapidly. In recent years, City Commercial Banks’either assets or market share, all obtained a rapid development which strengthened the competition in banking industry, speed up the marketization of commercial Banks and provides a strong support for promoting banking pluralism. On the year of 2004, the law of commercial bank capital adequacy ratio was a wake-up call for the developing city commercial banks. Compared with large state-owned commercial Banks and joint-equity commercial Banks, the department of city commercial banks can only rely on local government’s support, which makes the difficulty of meet the standard of capital adequacy ratio greatly increased. How to effectively complement the capital to solve the capital adequacy problem is an emergency question for all City Commercial Banks.This paper is based on the statistical model to study the influence factors of the city Commercial banks’capital adequacy ratio, in order to provide operational means to satisfy the capital requirement.The first part of this paper is mainly about the research background and significance of this topic, including current situation of domestic and international research, besides this, the thoughts style of this paper, research methods and innovative points were briefly described.The second part of this paper mainly introduces the status quo of city-bank’s capital ratio, from the definition of City Commercial Banks in China to the overall development situation of City Commercial Banks, this part tries to make it simple and stark to facilitate readers from grasping the trend of the development of City Commercial Banks.The third part of this paper is firstly analyzed the influence factors of capital adequacy ratio, it mainly selected a few key indicators such as shareholders’ equity, asset scale, bank profitability and bad loans ratios etc are simply described, on this basis, the author selects representative thirteen City Commercial Banks as the samples of empirical analysis, by using the software of stata9.0 to make the Empirical analysis.The fourth part and the fifth part is on how to raise capital adequacy ratio for City Commercial Banks, the fourth mainly concludes internal financing ways and exogenous financing ways. Endogenous financing channels rely mainly on choosing different competition strategy, making right market positioning, and quickening business transformation and so on to improve profit space. Exogenous financing means contains accelerating IPO process of the City Commercial Banks and introducing foreign strategic investors and folk capital to improve their capital situation.The fifth part is mainly about ways to strengthen the measures to raise capital adequacy ratio, which referred to adjusting asset structure, enhancing the asset quality distribution, launching the measures such as asset securitization, optimize the assets structure, reduce risk assets’weight. In addition, the regulators should do something to give a friendly environment and support policy for City Commercial Banks; what is more, the supervision is also needed to ensure the stability of the banking system in China.