The Impact Of Internal Governance On Bearing The Risk And Operational Performance Of City Commercial Banks

As the product of our country restructuring the urban credit cooperatives,the purpose is to sever the community and small enterprises, to provide financial support for regional economic growth.With its rapid development speed, the total assets' growth rate has ever been as high as 30%. By now, the city commercial banks have become the very important part of our country's banking system, and play a huge role on improving the market structure and competition,improving the financial services, support regional economic development and maintain regional financial stability, etc.However, in the procedure of fast development,those city commercial banks developed in big gap,and now, it is on the key moment,but some city commercial banks are still having many shorts such as do not have the special business, the competition and the power for developing are not enough and so on.And the exist of those problems is closely related to the internal governance of the city commercial banks.Above all, we want to study the city commercial banks to know the relationship between the internal governance and the risk and earnings,and then get the measures to improve the internal governance of the city commercial banks.The article selects 27 city commercial banks which the assets are more than 50 billion until2014 as the research object, by reading the annual report to get the data from 2008 to 2014, to study how the internal governance of city commercial banks affect the risk-taking and performance, and then check the problems existing in the internal governance and make improvement. The results showed that: the nature of the first big shareholder of the city commercial banks has no significant influence on the risk-taking, but if it is the area finance bureau, it has a positive impact on business performance; Ownership concentration has a negative impact with the risk-taking and the performance, which induces that reducing theequity concentration of the city commercial banks will be beneficial to the development of bank business performance; The board size assumes the inverse correlation between the risk-taking but does not significantly affect performance; And independent directors proportion is positively correlated both; Executive compensation incentive mechanism has no significant effect on risk-taking, but positive correlation between performance and executive pay, that means make the connection of compensation and performance will be good for the banks' performance.