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Research on Measurement of Commercial Bank’s Credit Risk for Real Estate

On 23/11/2014, in Economics papers, by rain

Credit assets are dominating ones for banks, while banks are the natural market for accumulating and trading risks. As a result, credit risk managemet comes to be an eternal subject. At present, it is important for China to make research on credit risk Management for real estate.With the development of econometrics and Computer technology, many major financial organizations developed various credit Management models. According to the characteristics of the real estate credit in China, Credit Portfolio View model is choosed to measure and forecast the credit risk of real estate. First of all, this paper gives some details for the related concepts of real estate credit and especially points out that it is possible and necessary to carry out the credit risk measurement for real estate.Secondly, it reviews the development of credit risk measurement models and compares the third-generations credit risk ones. It combines with the conditions in Chinese commercial banks to show the advantage of using CPV model to measure and forecast the credit risk of real estate. Thirdly, in terms of choosing three macroeconomic varies (Composite Leading Indicator, Macroeconomic Index.and China Real Estate Climate Index), and the transformation value of the default probability of real estate credit. This paper gives an estimate of CPV model with the‘Eviews’software By comparing the fitted value and real value of the default probability of real estate credit, CPV model shows efficiency to measure the credit risk of real estate. Then, this model is used to forecast the default probability of real estate for Novemeber, 2007. Finally, based on the credit risk measurement, from possibilitiy and necessity aspects, the ways on how to decrease credit risk are given.This paper can come to a conclusion that, CPV model is full of high rationality and efficiency to measure and forecast the default probability of real estate credit risk and can offer the robust references for the commercial banks to defense the credit risks. Meanwhile, it also confirms that default probability is linked to economy closely. When the economy worsens, default increases; when the economy becomes stronger, default decreases.

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Study on Commercial Bank Corporate Customer Satisfaction

On 10/11/2014, in Economics papers, by rain

With the increasing competition in the market, more and more enterprises realize the benefits of customer satisfaction and the importance of improving level of customer satisfaction Management. Customer retention rates and profit margins are closely linked with customer satisfaction. As a member of the service sector, the Management of commercial bank satisfaction is affected by many factors, especially after the20th century and90years. Now the position of banks and enterprises is being changing gradually. How to maintain corporate customers and make these customers satisfact with financial product and service is an important issue. Discussing the satisfaction of corporate customers is a foundation work to commercial banks.In this paper, based on the results of previous studies, we outline some concepts of customer satisfaction related to commercial banks. And also we construct some impact factors and indicators of commercial banking satisfaction based on bank credit. On these basises, we build a commercial banking business model of customer satisfaction and a evaluation system, then we analyse those by empirical research method.The purpose of this study is to understand the major impact factors of commercial bank customer satisfaction by learning customer satisfaction evaluation model and the analysis of weight in our country. Also, with combination customer relationship management with industry characteristics, we can have a better understanding of strengths and weaknesses for China’s commercial banks and the most urgent needs of Enterprise customers, so it can provide some theoretical basis to enhance competitiveness of commercial banks.

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Design on the Development Mode of Chinese Commercial Banks’Carbon Finance:Based on CDM

On 17/10/2014, in Economics papers, by rain

At present, the problem of global warming has become a worldwide concern. Finance as an optimal allocation, adjust capital surplus and deficiency of the important ways and means, play an important role in low carbon finance, commercial banks has find a new direction for future development.This paper firstly expounds the connotation of carbon finance, points out that the importance of a research of carbon finance model; from related financial theoretical basis, research on the carbon emissions trading system for carbon pricing mechanism, use the capital asset pricing model and Zipf method, analysis of internal factors and external factors that impact of a carbon price; process SWOT analysis, conclude and summarize the necessity to developing of carbon financial; finally, the paper summarizes the research results in related fields and build out the involvement of commercial banks based on CDM project carbon finance income model, do a detailed case analysis as an example of Xing Ye Bank.The study concluded that designing of carbon pricing need consider from carbon abatement costs, market supply and demand, government regulation and control mechanisms; carbon price is not only affected by the factors of rate of return and market risk, but also affected by energy price and temperature; commercial banks making carbon finance business can help expand their business scope and increase revenue. Through the study, this paper put forward specific policy recommendations to the development and improvement of carbon finance market, for example, developing carbon financial derivative products, implementing the carbon innovation in financial services, promoting low-carbon concept actively, and so on.

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Research of Liquidity Risk in Commercial Banks

On 04/10/2014, in Finance, by rain

Liquidity risk is known as “the most lethal risk of commercial banks” for its stronguncertainty and great damage. In China, commercial banks’ liquidity risk Management isbackward, if the macro environment changed, liquidity pressures will make thecommercial banks facing unprecedented liquidity crisis. As the world’s economicenvironment changes, China’s commercial banks will face more and more complexmacro and micro environment, liquidity risk will become more and more important.Therefore, the study of liquidity in commercial banks has a strong practical significance.This article study the liquidity risk by the idea of how to generate liquidity risk–howto measure–how to manage. First, we analyze the reason of liquidity risk by using D-Dmodel, and find that the liquidity risk comes from the bank itself. Then introduced themeasurement methods of commercial banks, and compare the risk level of China’scommercial banks. Next, we analyze the factor of China’s commercial banks’ liquidity risk.Finally, we draw lessons and learn from the financial crisis and the Basel Committee onliquidity risk Management. At last, we give some advice on how to manage liquidity riskbased on the problem of liquidity risk in commercial banks of China.

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The Functional Study of Commercial Banks Supporting Low-Carbon Economy

On 04/10/2014, in Finance, by rain

The low-carbon economy is starting a change of Economic growth modetransformation all over the world with the feature of low pollution and low emission,low energy consumption. The development of the low-carbon economy need supportof money, technology and policy. The financial support plays the most important roleamong them. Our country’s financial structure have been giving priority to indirectfinance all the time. And commercial banks as the major supplier of indirect financeshould provide financial supports for the development of the low-carbon economy.Mingkang Liu, the chairman of banking regulatory commission suggested thatcommercial banks should play the role of making innovations for the low-carbonfinance. Therefore, analyzing the effect and the existing problems of commercialbanks’function in the process of the development of the low-carbon economy ishelpful to the development of carbon financial business and low-carbon economy inour country.Based on the perspective of financial function, the theory analysis and theanalysis of the present situation of commercial banks’services to the low-carboneconomy, this paper divides the function of commercial banking servicing the low-carbon economy into two part: resource allocation function and Intermediary servicefunction.The next two chapters of this paper develop the function mechanism analysis,the effect analysis and empirical analysis of resource allocation function and theintermediary service function of commercial banks’services to the low-carboneconomy, and discusses the problems of the two kinds of functions. Based on theresults of theoretical and empirical analysis, this paper finally proposes functionoptimization proposals of commercial banks’services to the low-carbon economy fromthe perspective of resource allocation function optimization, intermediary servicefunction optimization and functional integration. The third chapter adds theeconometrics model into this paper and tries to do the empirical research for the leveland the influence factors of the resource allocation function of commercial bankingservicing the low-carbon economy.This paper makes some positive exploration for the financial functions ofcommercial banks’services to the low-carbon economy using the method of thecombination of the theory analysis and the analysis of the present situation and the combination of the quantitative analysis and qualitative analysis, and get theconclusion as follows: the commercial banks play resource allocation function byimplementing green credit policies, and play intermediary service function throughthe innovation of low-carbon middle business. At present, the commercial banksprovide financial supports through the green credit primarily, but the development oflow-carbon middle business is still at the beginning and has serious shortage of supply.Resource allocation function is the core function for commercial banks’services to thelow-carbon economy, and intermediary service function should be strengthened.

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The Analysis of the Sustainable Growth of Chinese and Foreign Commercial Banks

On 02/10/2014, in Finance, by rain

Commercial banks are not only an important component of China’s financialindustry, but also are also the major force to maintain and promote the smoothoperation of China’s economy. In the era of increasingly serious resource constraint,the sustainable growth of commercial banking is a hot issue in the academic field.Since the outbreak of the international financial crisis in Jul2008, people began topay more attention to how to make the commercial banks on a sustainable growthpath, which allows the commercial banks to ensure a high growth business andachieve the Enterprise value in the condition of established financial goals in thisprocess.By using the normative and empirical analysis, this paper built a theoreticalframework for analyzing the sustainable growth of the commercial banks after the keyconcepts being clarified. In empirical part, the samples are selected as16China’s and32foreign listed commercial banks. Through the investigation of the status quo andtheoretical analysis, this paper researches the status of sustainable growth and actualgrowth of them in the last five years (2006-2010) by descriptive statistic, Wilcoxonsigned rank test and multiple linear regression analysis, etc. Then we compareChinese commercial banks with the foreign commercial banks by the actual growthrare, sustainable growth rate, ROE, the relativity of growth speed and value goal, theimpact of the size and age of the commercial banks on the value goal. It also pointedout the characteristics of them and tested the related hypothesis, and analyzed whyresult in the difference. Main research findings are as follows:The actual growth rate of China’s listed commercial banks is higher than thesustainable growth rate in the same period, which means they achieved “high growthrate” rather than sustainable growth. The foreign commercial banks did not achieve”high growth rate”, but they achieved sustainable growth basically.The change of Enterprise value of Chinese commercial banks is not significantly related to the change of growth speed. But the change of Enterprise value of foreigncommercial banks is significantly related to the change of growth speed. Besidesgrowth speed, the impact of the size and age of commercial banks on the value goal isalso different.Finally, it proposed deepening the corporate governance of China’s commercialbanks and balancing the relationship between dividend payments and retainedearnings according to the results of empirical and comparative analysis.

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On the Instirutional Risk of Commereial Banks Credit Operation in China

On 25/09/2013, in Finance, by rain

After nearly30years development, especially into the21st century, China has gradually integrated into the wave of financial globalization, China’s banking industry has achieved a great development,whether in the variety of business, the scale of development, or the innovation ability and Management level.In recent years, in the environment of our country’s Economic growth, the state-owned commercial bank constantly increasing the supply of credit, the credit risk Management of commercial banks has increasingly become the important contents for sustainable development. Especially in the current complex and volatile international Economic and financial situation, China’s commercial banks still need to Crossed the barrier–the quality of loan,in order to maintain a good momentum of sustainable development.By observing the growth process of the Bank of China, Industrial and Commercial Bank of China, China Construction Bank and Agricultural Bank of China, we find that the Development of four banks in Stock market is closely linked to the Government to inject huge sums of money stripping the non-performing loans. Moreover, the current proportion of non-performing assets of state-owned bank will continue to downward, and the new non-performing loans continues to increase, the control of the quality of credit assets has become a very important day-to-day work to commercial banks. Especially in recent years, with the changes of national macro-control policies, market conditions and business, the credit risk of commercial banks showing new features and new trends. How to improve the Management mechanism and effectively prevent and resolve the credit risk are the current problems that commercial bank need to be solved. Through the analysis of the cause of non-performing loans of state-owned commercial Banks of our country, the author find the non-performing loans produced by the institutional risk accounted for larger proportion and the business bank of our country faces from all aspects of the institutional risk.The main significance of this thesis lies in finding out effective way to improve the quality of assets of commercial bank through the analysis of a variety of institutional risk that China’s commercial bank facing in the course of credit management.The institutional risk be analyzed in this thesis includes not only the commonly referred to as macro-economic system risk but also the medium industry system risk and micro Enterprise management policies and the risk of the bank’s internal operating system. The purpose of this thesis is to enhance the credit and risk management ability of China’s state-owned commercial bank comprehensively. It highlight the combination of theoretical research and applied research, makes multi-disciplinary knowledge together and play the advantages of comprehensive research. With this, it enhance the comprehensive, applicability and operability of the research results.The thoughts of this thesis can be listed as follows:It elaborate the theoretical connotation of the institutional risk in commercial bank credit business at first. Then study the theoretical roots of the formation of commercial banks institutional risk under the market economic system. It analyzes the characteristics of the institutional risk in China’s state-owned commercial credit business from both internal and external. It gives further analysis of the process and produce mechanism to various types of risk and uses empirical analysis method to draw research conclusions. At last, it gives policy suggestions of the ideas and strategy to the institutional risk prevention in China’s state-owned commercial banks. The thesis draws on predecessor’s research achievements and gives my new opinions.

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Operating Performance Analysis of the Four Major State-owned Commercial Banks

On 25/09/2013, in Finance, by rain

With the development of market economy, people has paid more and moreattention to the financial industry, because its rise and fall have exerted an enormousinfluence on the development and stability of the overall Economic.The Commercialbank is the main body of the financial industry. Its business performance is in part areflection of the macro economy development, on the other hand,that is influenced bythe physical Economic.So it plays the role as the “regulator” and the “mirror”. Thehistory of commercial bank is very long, and its Management mode also undergoesseveral changes, from the initial assets Management to off-balance sheet Management,the attention of performance evaluation also transferred accordingly. Therefore, thefinancial analysis and the performance evaluation of the commercial bank can help usunderstand the condition of business development, looking for advantage andproblems to lay a solid foundation for the future development of commercial banks ofChina to form a unique core competitiveness and win victory in the increasinglyfierce competition.This article is based on the above reasons, using the financial index system to givea comprehensive explanation and analysis about the performance of commercialbanks by means of case study, and selecting four major state-owned commercialbanks of China (Bank of China, Agricultural Bank of China, Industrial andCommercial Bank of China, Construction Bank of China)2010annual financialstatements as the analysis objects. Firstly, compared financial indicators which aredisclosed in the listed bank statement with the performance evaluation indicators ofgeneral industry Enterprise, and making an analysis of the difference from the angle ofindustry specific, pointing out the defects of the financial indexes disclosed bycommercial banks. Secondly, since the bank’s management focus on profitability,safety, liquidity, this article complements and reclassify the existing financialindicators in these three aspects. According to the intrinsic meaning of the indicators,financial indicators are divided into four aspects as profitability, capital security, riskmanagement and operational efficiency, then discussing the relationship between the specific indicators and various types of indicators briefly. Thirdly, apply there-classification index system into the operating performance evaluation of four majorcommercial banks of China to identify their shortcomings and advantages in themanagement. At the same time of comprehensive analysis, pay attention to theindicators which reflect the unique attributes of the commercial bank management.Finally, evaluating the current business, risk management, cost control situation of thefour banks, and give the recommendations to improve the performance ofCommercial Banks. In addition, make outlook combined with the development trendof banking industry of China.The starting point of this article is not to reconstruct a new performance evaluationsystem, but rather focuses on the complement and re-classification of the existingfinancial evaluation and apply it to the comparative analysis of the performance ofcommercial banks. The object is to help stakeholder understand how to use financialindex this objectivity performance evaluation tool to in-depth analysis of commercialbanks operating conditions.This article has strong practical value.

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An Empirical Research of CSR Impact on Financial Performance of China’s Listed Commercial Banks

On 21/09/2013, in Finance, by rain

With the rapid development of industrial economy,many industrial giants andmultinational companies was born in the corporate merger wave in the early20thcentury,their mad pursuit of profit regardless of the business activities of the socialimpact caused by the monopoly and restrict competition, the Social gap between richand poor started to increase; the resource stock plummeted; the ecologicalenvironment deteriorated sharply;counterfeiting and commercial fraud continue tooccur,all these situations make people began to question the single operator purposeof pursuiting profit maximization, and began to realize the importance of CSRcommitment. As the core of modern economy and an important means of socialredistribution of resources, the financial industry is also given more attention to CSRin the wave of the CSR movement as well as made various attempts and exploration inthis area,especially in the21st century, In the context of Economic globalization, thecompetition between banks has been mainly on the hardware into software; Mainlytechnical, product competition into Philosophy and Moral standards.Concerned aboutthe legitimate rights and interests of all stakeholders,to win a wide range of publictrust and support,is the fundamental to the success of the banking sector.Based on the financial crisis for background,this paper first introducted thetheoretical foundation of financial evaluation of CSR about commercial banks, anddefines the concept of CSR and Social responsibility system contains sixelements,including shareholders, consumers, employees, government, community,Environmental responsibility,then,from the financial point,the article builds a CSRevaluation index system according to the content of CSR appraisal. Once again, thepaper chooses listed commercial banks in Shenzhen and Shanghai stock exchanges asresearch object over the period2006-2010,using the above model to appraisal theCSR after collecting data which are reflect of CSR, then tests the correlaterelationship between commercial banks fulfill their Social responsibilities andcorporate financial performance empirically. Through the empirical studies, we foundthat there are positive correlation between commercial banks to fulfill socialresponsibility and financial performance.Finally, according to the empirical analysisand the reality of CSR in commercial banks, the paper puts forward some proposals tostrengthen the social responsibility of commercial banks.

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Transformation of Commercial Banks Under the New Situation

On 21/09/2013, in Finance, by rain

Commercial bank Management transformation theory is not a new topic, but, in the current our country commercial bank Management practice, especially after the global financial crisis, bring regulatory environment and business environment changes, makes commercial bank management transformation still is a very important content, and it is a very urgent question. Therefore, the research has important theoretical and practical significance.This paper expounds six chapters, the first chapter is an introduction of this paper, this paper expounds the background and significance of both at home and abroad, the current situation and the developing trend. The second chapter presents capital constraints and commercial bank management transformation in the paper. Chapter3shows the new situation of commercial bank and the transition direction. This chapter4shows transformation strategy and measures under the new situation of the commercial bank. Chapter5combined with commercial bank management practice finally, through to the domestic Economic capital management, the pioneer of China construction bank head office of this case, to the theory of Economic capital management and structural change in the modern commercial bank management is the only way of transformation. The sixth chapter presents the study conclusion and the future research direction.After the financial crisis, the commercial Banks face at home and abroad and the operating environments has changed a lot, and at the same time, the regulatory environment has changed greatly. Domestic commercial Banks in the face of shareholders, supervision, and increasingly severe market restraint at the same time, after the financial crisis facing influence and lessons, domestic economy structure adjustment, its own profit single structure and take off the media and the financial markets financial deepening brings a series of challenges. How to deal with this a series of challenges, strengthen management transformation is imminent deal with the road, the advanced foreign commercial Banks in operation in the transformation of experience, good Economic capital through their management capacity and reasonable management structure makes it a great progress has been made in business development. The business bank of our country, how to realize the transformation of business, must want to have a clear direction, at present, to improve the utilization efficiency of the capital market, stable growth, increasing the service ability, strengthen risk control ability, promote innovation consciousness is certainly the only way of commercial bank management transformation. Combining with the commercial bank management practice, this paper expounds the business transformation in how to through the economic capital management, FTP principles are the allocation of resources, the reasonable control risk several aspects to strengthen internal management and optimizing the structure of business. Finally, this article through to the domestic economic capital management, the forerunner of the China construction bank of this case, to the theory of economic capital management and structural change in the modern commercial bank management is the only way of transformation.