China’s City Commercial Banks Spanned Operational Problems

City commercial banks is an important part of China’s financial system, play a significant role of financial support to the local economy, especially small and medium-sized enterprises, at the same time, the city commercial banks are also accompanied by their support for the development of the real economy, to get a more fast growth, According to CBRC latest data show that in January2013, our City firm the size of total assets has reached12trillion, accounting for9.3%of the banking financial institutions. the city commercial banks in the development process showing a cross-regional business trends, by the end of2011, the city commercial banks have been more than130through a variety of ways to achieve inter-regional development, the size of total assets increased by27.15%, much higher than18.87%of the entire banking industry, asset size growth rate, showing a faster, expand the scope of the overall trend.In addition to the pursuit of economies of scale, diversify risks inherent reason, the city commercial spanned operating also influenced by the local government. Due to historical reasons, the city commercial Since the establishment of the local government to form a close relationship,"Provisional Measures for the Administration of the city commercial banks under the city commercial banks shareholders by the local government, local businesses, individual businesses as well as city residents in1995, which local finance as the largest shareholder, the highest proportion of30%of the shares, individual enterprises require shares shall not exceed10%, the individual shall not exceed2%, and shares of local businesses are basically state-owned enterprises, local ownership of state-owned enterprises belong to the local government, Therefore, from the city commercial establishment, the local government has absolute control of the city commercial banks.As the subject of property rights, the local government does not have the personification characteristics will certainly choose to bank officials as a government agent to exercise their powers, which appeared in the principal-agent problem, the local government administrative commands are often associated with the city commercial revenue maximization objectives deviation. Local governments in order to make achievements, bigger and stronger local financial institutions, or even to seek a listing agent in the target level promotion scale expansion preference, and promote the city commercial sub-agencies located in different places, and the expansion of the asset size. Administrative intervention instead of market guidance, bound to a negative impact to the City firm’s operating efficiency, but the current situation of the development of city commercial good overall cross-regional business development, and brings in huge profits for the City firm. City firm in2011after-tax profits of108.1billion yuan, an increase of40.4%compared with2010, the return on assets1.08%return on assets, an increase of0.1%compared to2010, from the data of the past six years, the assets of the city commercial The steady growth rate in the state, show that government intervention under the city commercial operators have not been entirely inefficient administrative intervention under cross-regional business development of city commercial positive sense. The city commercial cross-regional business and government for a territory is no longer "coincidence" can explain this contradiction, off-site business break through the boundaries of the administrative jurisdiction of the local government, reduce administrative intervention intensity, city commercial lost in a foreign country, the protection and support of the local government, promote the implementation of market-oriented reforms in the fierce competition, thus weakening the negative impact of government intervention.Although the cross-regional business makes the city commercial strength, brand benefits also improved, but at the same rapid pace of cross-regional also exposed some problems, market positioning fuzzy cross-regional business city commercial banks have begun to highlight the shortcomings of the regulatory authorities also began to re-examine the city the firm’s development, strengthening the city commercial business access threshold for cross-regional, city commercial cross-regional development strategy and market positioning caused more and more people’s attention and thinking.In the end, this paper put forward policy recommendations of the city commercial development strategy and government regulators, under the conditions of a market economy, the city commercial inter-regional development is an inevitable trend, not only to promote the City firm’s own progress, but also to promote the economic development of the region, but should avoid blind expansion homogenization compete. Cross-regional business should be based on the prefecture-level cities, serving SMEs, walking the core competitiveness of specialty differences. The government should not simply improve the access threshold to block the city commercial cross-regional business momentum, but should based on comprehensive consideration of the overall status of the city commercial classification management, offer policy guidance to encourage the city to take a good cross-regional business for the city commercial individual differences to improve access policy.