Research On The Effect Of Capital Constraint On The Efficiency Of China’s Commercial Banks

Commercial banks play an important role in China’s market economy and shoulder the important task of optimizing the allocation of funds in the financial market.As the outbreak of the American subprime crisis spread to the end,the supervision and management of commercial banks are constantly changing.From the Basel agreement,the new Basel agreement to the Basel Agreement Ⅲ,the capital supervision of the commercial banks is becoming stricter.The external capital constraints and the internal capital constraints have become an effective tool to reduce risk for commercial banks.This strict capital constraint,on the one hand,can indeed reduce the business risk of commercial banks,but on the other hand,it will reduce the profit of com mercial banks and affect the efficiency of commercial banks.This paper is to study the impact of capital constraints on the efficiency of China’s commercial banks,and to explore the countermeasures for commercial banks to improve their operating efficiency under capital constraints.This paper selects 16 listed commercial banks in China from 2010 to 2016,and uses the DEA-Tobit model to study the impact of capital Cconstraints on the efficiency of Chirna’s commercial banks.The paper first measures the technical efficiency,pure technical efficiency and scale efficiency of commercial banks by using the variable DEA model of scale reward,and compare and analyze the various efficiency of different banks.Then,because the technical efficiency of the DEA model measure includes the pure technical efficiency and the scale efficiency,the paper selects the technical efficiency to measure the efficiency.The operational efficiency of commercial banks is based on the index of the commercial bank’s capital adequacy ratio,the rate of bad loan,the coverage rate of the reserve,the maximum loan rate and the liquidity ratio of the single customer.The paper chooses these indexes as the external constraint index.The weighted risk assets return is taken as an internal constraint index.Then the paper examines the impact of different indicators on the efficiency of commercial banks.The results show that there is a positive correlation between the non-performing loan rate,the reserve coverage rate,the single customer maximum loan rate and the weighted risk asset yield and the commercial bank efficiency,while the capital adequacy ratio and liquidity ratio have little influence on the commercial bank efficiency.Based on the results,the paper proposes suggestions for improving the efficiency of commercial banks.That is:first,to broaden the external financing channels,improve the proportion of endogenous financing supplementary capital;second,adopt the classification system,to raise adequate coverage,improve the ability to resist risk;third,the use of big data to collect customer credit data,evaluate customer default risk;fourth,set up risk measurement department,focusing on the use of statistical models to determine the amount of capital required by commercial banks;fifth,establish an internal supervision group,check the business operation process of commercial banks regularly and evaluate the performance of each department;Finally,we should establish a timely reporting system and feedback mechanism for risk monitoring,which can control the risks of commercial banks timely.