Research On Commercial Banks Competitive Evaluation In China Under The Perspectiveii Competitive Equation

In December2006, according to the relevant rules of WTO and ourcommitment to accession to the WTO，our country financial market began toopen up to the outside world, a large number of foreign Banks in Chinacompete with our country bank Omni bearing and takeover our countrymarket gradually. In addition, with the globalization of global economy and theintegration of finance，if we cannot improve the competition of China bankseffectively, financial stability will be influenced by the situation，even there willaffect global economic development. Facing the pressure from all aspects，China commercial banks want to have a good hand in the fierce competition soas to enhance their competitiveness urgently. Consequently, it is of greattheoretical and practical significance to evaluate and analyze our countrycommercial bank competitiveness objectively。This article study11bank in our country and make a comprehensive andobjective evaluation of their competitiveness from the perspective ofcompetitive equation (bank competitive=bank Competitive asset×bankcompetition process) in2008and in2009. In the model of competitive asset,this article introduces the index of measuring market value at risk. Then itevaluates this side and get competitive assets index with factor analysis. In thestudy of bank competitive process, the efficiency index will be introduced to thecompetitive process, and it takes the loan loss reserve that reflect the riskinformation as one input to compute the efficiency index. Then we cancompute competitive process index which includes efficiency index that basedon Data Envelopment Analysis (DEA) and target growth rate. Finally, throughthe equation of competitiveness, we can get bank competitiveness index.Hence, we can take measures to improve bank competitiveness throughforegoing research and analysis. Firstly, we can improve bank competitiveness assets by enhancing capital adequacy ratio. Secondly, in order to enhancecommercial bank scale competition we can explore some channels that add itscapital fund commercial to expand its scale and strengthen the actualIIIstrength. Thirdly, By means of financial innovation, we can enlarge share ofmarket and consolidate original profits. in addition，it is very significant tocultivate new kinds of business by positive financial innovations. The newkinds of business will bring new profit and raise banks’ sustainablecompetitiveness. Fourthly, Commercial banks can take advantage of theclause of WTO to expand their international business and participate inexternal competition. With favorable conditions， they can cultivate high qualitypotential customers for themselves.