Research On The Relevance Of Regulatory Requirements Of Capital Adequacy Ratio Of Commercial Bank And Operating Performance Of Bank In China

In recent years, since the large-scale financial crisis caused by the sluggish regulation of bank capital, more and more countries are realizing the significance and necessity of seeking for a capital regulation system suitable for the development of their own counties. In 2010, the Basel Committee released the "Basel Capital Accord III". In October 11,2012, the Basel Committee released "the importance of bank governance framework of national system". From here, integrated with the latest regulatory requirements on capital adequacy ratio (CAR) according to the Basel Accord, banking regulatory bureaus in China put up forward a new regulatory policy, named "Regulation governing capital adequacy ratio of commercial banks (Trial)", to differentiate division and regulation among different banks, on bank’s capital adequacy ratio.High capital adequacy ratio guarantees the strength and paying ability of banks. However, as an expensive operation cost, high capital adequacy ratio regulatory requirement affects the commercial bank’s financial leverage level. Excessive demands on capital adequacy ratio regulatory requirement can often reduce profitability and efficiency of commercial banks, cause losses of developing vitality and core competitiveness. Therefore, the degree of capital adequacy ratio is a problem like playing a gambling and chess. For a better and faster development of the entire banking industry, this paper strives to explore the effect law of capital adequacy ratio regulatory requirement on operating performance, and put forward reasonable suggestions on effectiveness of capital adequacy ratio, aiming to have a intimate combination of bank efficiency.This paper firstly gives a descriptive statistic analysis aimed at the fact of being up to standard of systemic bank’s capital adequacy ratio and the statement of changes in bank’s operating performance after the new policy was approved. Then this paper makes regression analysis combined with bank’s comprehensive performance analyzed by principal component analysis. Finally, the results of the study show that commercial bank capital adequacy ratio in China is significantly positively related to comprehensive performance index. According to the results of the study, this paper puts forward valuable suggestions on how to have a better coordinated development between operating performance of commercial banks and regulation of capital adequacy ratio. the suggestions are as follows. For regulators of capital levels, they should formulate capital adequacy ratio reasonably; Establish dynamic capital managing and regulatory regimes, and promote the use of capital under a efficient, safe and reasonable way; For the commercial banks themselves, they should improve capital replenishment system, and keep finding new profit streams; Increase in capital through multiple channels, and improve the capital adequacy ratio; Advance security system accompanying capital regulation.