The Synthetic Efficiency Measures Of The Chinese Commercial Banks Based On The Two-stage DEA Model

Recently, the liquidity risk that exists in the banks has constantly been exposed. There was a panic when people heard the massage of money shortage and default. So, bank managements need to strengthen the safety and liquidity of bank at the same time to pursue of profit maximization.According to above issue, in this article, efforts are made to analyze the synthetic efficiency of commercial banks combining the safety, liquidity, profitability of commercial banks.This paper involves six chapters, and Main ideas are summarized as follows.Chapter1firstly points out the background and importance of this paper. Then it introduces the concept of synthetic efficiency of Chinese commercial bank. After summarizing the basic mode in the data envelopment, its advantage and application in the bank efficiency, chapter2of this paper presents the development of the model and the underestimation of efficiency because of the neglection of bad-performance loans. At last, reserve is brought in to evaluate the efficiency of our commercial bank.In chapter3, a bank efficiency assessment model is built in the governance of the reserve requirement based on the two-stage game theory data envelopment model to verify the influence imposed upon it by non-performing loan in the output of bank, and to probe into issues of bank synthetic efficiency. Then we provide a method to solve the non-liner model. The proposed approach is illustrated in Chinese19commercial bank in chapter4. After that, we use a Tobit model to analyze the impact of non-performing loan and reserve in chapter5.Chapter6summarizes the previous chapters. The State-owned bank synthetic efficiency is lower than the shareholding banks. The non-performance loans are negatively related to the synthetic efficiency. There is also cooperation between the traditional banking activities and financial product in the operation of the commercial bank in China. The last chapter of this paper gives the proper suggestion aiming at the above problem. Firstly, there needs a deepening reform on the ownership structure of the Chinese commercial banks. Then banks should diminish the amount of ill loans and improve the asset property quality. Lastly, banks need to make great efforts to promote the financial product and give a guarantee to traditional banking activities.