Research On Financing Issues Of Preference Share In Commercial Bank

Preference share came into use in UK as a special financing tool in 1825, developed and improved in the following hundreds of years. It has become a common financing tool and security. However, the economic and financial history of preference share in China is still relatively short.The State Council issued the Guidance to the Pilot of Preference Share in 30th, November, 2013, the China Securities Regulatory Commission issued the Regulation of Pilot of Preference Share in 30th, November 2014, which regulate the issue and trading of preference share. The issuing of preference share begins in some pilot companies.During the pilot, most of the companies with high enthusiasm are commercial banks. There is great positive significance to meet regulatory requirements and improve the financial quality by the means of preference share. Therefore, this paper aims to explore the financing problems of preference shares of commercial banks, including the financing process, present situation from the aspects of financing, accounting and law. Also it combined with typical case analysis, and put forward policy proposal at last. All of these form complete financing problem research of preference share in commercial bank.The author try to be innovative and the main innovations of the paper are as below:1. Reviewed the commercial banks preference share financing framework and analyzed from multiple angles such as finance, accounting, law and influence; 2. In the process of classification of preference share into financial liabilities or equity instruments, summarize and put forward the classification method of " two principals and four angels"; 3. Take real life examples of case analysis. In this paper, the author used first-hand data from the internship experience in G broker to increase the practical significance.The author thinks that in our country, it has a very important significance to the issuing of preference shares, especially for commercial banks. Commercial banks can effectively expand its capital, meet regulatory requirements, and improve its capital structure to a certain extent, optimize the financial index. Also, issuing preference shares can stabilize and enrich our financial markets, and has advantages to the construction of multi-level capital market.