Ownership Structure And Bank Stability

According to the "Annual Report2010" released by the China Banking Regulatory Commission in2011, China’s overall economic development was in the trend of steady growth, meanwhile, the development of the banking and financial institutions has provided a good opportunity, but in a complex and volatile international environment, and facing to the complex domestic and international political and economic situation, China’s banking institutions need to deal with a lot of risks and challenges.The financial system is the core role of the economy as a whole run, but due to the financial institutions in particular to operate the high leverage, information asymmetry, the risk of infectious characteristics, the nationalization to achieve financial security has become a choice of the government to manage the financial industry. In the financial sector, the government acted as a variety of roles:financial sector regulators, financial institutions, owners, market participants, the shore of the pension fund management institutions, the market runs directly intervene. The most prominent in the financial industry reason for the numerous government intervention or control for financial security considerations. There are many reasons for nationalization of the banking industry, state-owned banks is the initial stage of economic take-off, the carrier of the government to raise and allocate funds to solve the problem of shortage of capital in the development.In this paper, after a comprehensive analysis and rational thinking these perspectives, a research on whether institutional bank nationalization is really effective way to enhance the banks also even the stability of the financial system or not, thereby helping to safeguard the financial security risk aversion, prevent worldwide regional financial crisis, is an important issue. Research methods that draw on existing literature, this article obtained from Bankscope database for nearly10years of financial statements of different ownership banks by using Z scores research method which is popular in the world today, are analyzed and demonstrated financial stability of banks of different ownership and further discussion of the risk assessment of China’s state-owned banks, to discuss the risks faced by the global banking and attempts to analyze the possible response measures to enhance the stability of the entire financial system. Concluded at the end of this article, enhance the feasibility of solutions of different ownership bank stability.