Research On Commercial Bank Supervision Efficiency In China Based On Model BCL

The banking system have played an important role in the allocation of savings,settlement and social capital, as well as the entire financial system development, andeffective regulation on the banking sector composed an important part of the soundeconomic environment. The global financial crisis triggered by the U.S. subprimemortgage crisis in2007, made huge impact on the global banking industry, and alsoexposed serious deficiencies and vulnerabilities in the regulatory. The "Basel III" whichdirectly born from the financial crisis was approved at the G20summit in2010, aimed atcurbing the international risk. Early in2011, China has introduced the new four monitoringtools timely which is known as the Chinese version of the "Basel III". In this view, it isextremely important to discuss the efficiency of banking supervision whether from theimportant position that the banking industry possess in the entire financial system or fromthe emphasis on financial regulatory framework which was revised after crisis by variousinternational organizations. How to test and improve the efficiency of supervision ofcommercial banks in China is especially urgent.In this paper, we defined the connotation of effectiveness on the basis of reviewingthe background, meaning and related literature of the research, and then analyzed in detailthe guidelines should be followed, the prerequisites, and the factors affect effectiveness ofsupervision; builded the evaluation system for the efficiency of banking supervision inChina, including the evaluation system of regulatory objectives, costs and policy, and gavethe specific indicators quantitative descriptions. Then, according to the indicators in theevaluation system, we made an empirical test on China’s regulatory efficiency from twodimensions: banking development and banking stability with four specific indicators. Inthe process of empirical test, we used multiple linear regression and ridge regression, andgave a further explanation on the results of ridge regression. In view of test results, China’sbanking supervision is quite effective in general, regulatory effect on banking institutionsis obvious, and the efficiency is relatively high.Finally, this paper put forward several suggestions to enhance the regulatoryefficiency, such as clear regulatory objectives, apply regulatory policies flexibly, improve the regulatory costs, combine the internal and external management together, as well as acombination with macro-prudential and micro-prudential.