Competent Official Promotion Factors Will Impact On City Business Credit Risk Analysis

Since the Reform and Opening up, city commercial banks have theirown special development model and company system as anhighly-developed strength of our financial system. However,because of the city commercial banks regional characteristics andthe scarcity of credit resourses, inevitable,local goverment willintervent the loan behaviors of banks. Local goverment facilitatetheir operations by provide various forms of financial subsidies andhelping them improve the impact of asymmetric information. At thesame time, in order to achieve its economic objectives whatincludes political reasons, the local goverment intervent the banks’credit behavior,disrupt the market allocation of credit resources,what increasing the credit risk of the city commercial banks.In thebackground of the deepening of reform of China’s financial systemand the increasing complexment of financial marketenvironment,the risk management of commercial banks is elevatedto a new height urgent, what needs to be in-depth study and solve.Based on principal-agent theory, we deepening the analyzeperspective to the individual of charging officials in accordance with the way of local goverment exert influence on the business ofthe city commercial banks through the competent officials. Byanalyzing the factors that affect the charging officials’ promotiondesire from the external and internal, to discuss the infection ofpromotion desire to the credit risk of city commercial banks.It hasimportant practical significance to improve the banks’ riskmanagement.and to promote the healthy development of the banks’future.This article below selects three main index（non-performing loanratio、provisioning coverage ratios and loan-to-deposit ratio）fromfinancial reports of city commercial banks in certain Chinese maincities to measure the proxies of credit exposure from2007to2011and discusses the governmental influences from macro and microperspectives.Selecting the impact factors of city commercialbanks’ located charging officials’ individual desire for promotionas an object to study. Specific, including external and internalfactors. External factors including macroeconomic indicators suchas GDP growth, fiscal revenue and CPI index.Internal factorsinclude the academic qualifications,retirement age of chargingofficials. Analzing the influence on city commercial banks creditrisk from view of the competition of charging officials. We use OLSto making regression analysis to the seclected variable. The studyresults show that GDP growth have a relatively high, CPI indexsmaller. Higher finanicial income areas will significantly impact thecredit risk of local city commercial banks. And the lower qualification, the nearer to retirement age, this influence willincrease.