A Study On Incentive And Restrictive Mechanism Of State-Owned Commercial Banks Based On Principal-Agent

State-own commercial banks have become the center of gravity in China’s banking systems and its reform has also become the important part in China’s economic reform. With the shareholding reform of China’s banking system in 2010, it is core for financial reform to promote state-own commercial bank governance structure and sustainable development. Commercial bank is the part of financial service and is a high added-value industry by providing knowledge service. Human resource is core for capita and wealth. How to inspire and constraint staff is the most important issue in company governance and management. Based on the performance of China’s state-owned commercial bank, there is significant gap of human resources efficiency compared with it in foreign-owned bank and shareholding bank. It is due to the lack of effective mechanism to inspire and constraint staff. Establishment of inspiration and constraint mechanism, therefore, play the important roles in China’s banking system reform.In this paper, we will review the current inspiration and constraint mechanism and apply the problems by using the related theory of economics and management. The paper will be structured into five chapters:we will introduce the background and relevance theory as well as research method in the first chapter; The theory of management and economics about the inspiration and constraint mechanism will be presented in Chapter 2; we will take the case studies from US, Germany and Japan and describe the experiences from these country’s commercial banks in Chapter 3. The current issues of China’s commercial will be presented and be discussed in Chapter 4; Chapter 5 show the analysis of incentive indicators of state-owned business bank. we conduct the correlation and regression analysis for 5 state-owned bank and shareholding bank with 36 observation data in 3 years.; In Chapter 6, we will propose the basic principle of establishment of inspiration and constraint mechanism for China’s state-owned commercial bank, and attempt to answer how to establish the inspiration and constraint mechanism through synthesizing the economic and political inspiration and temporal incentives. Chapter 7 is about conclusion of this paper, presenting the results of this research and future work.