The Reputation Of The Commercial Banks, Research

The reputation of bank is a subject that is a daily concern but lacks of the sufficient economic analysis, but the development of reputation theories offers facilities for it. With the analytical tools from game theory, this paper will attempt to systematically study the subject under the framework of micro-bank theory and neo-institutional economics. My research fields are as follows: The main problem will be dealt with is why the bank needs reputation and how the reputation of bank is formed and changes. This paper sets up a framework under that we study the formation, role and effect of the reputation for a bank. The other topic includes that we analyze the real case for the reputation of the bank.From the point of structure, this paper has four parts. In the first part, we survey the existing researches that have been done to prepare the fundamental basis for the continuing analysis in the chapter 1 and chapter 2. The chapter 1 is the Introduction of the paper. The second chapter includes that we make some special comments on the general theory of reputation and its application and we emphasize the trade-assurance function of the reputation by the concept of specific assets. From the point of such function, we can judge how the reputation will be increased or decreased. That will be a theoretical premise for the analysis of the bank.The second part includes chapter 3, chapter 4, chapter 5 and chapter 6. In the chapter 3, we study why a bank could exist and the problem of instability of micro-structure to introduce a question why a bank needs its reputation in the industry. In the dynamic game model with imperfect information, we study the role of self-fulfillment in the process of forming the reputation and we conclude that the initial reputation of a bank and the degree of concerning on the long-term interests deeply affect the behavior of setting up the reputation of a bank and the utilities of its reputation. The chapter 4 further studies how the bank and its depositors make effects on each other and we can analyze the effects on the bank reputation from the method of setting up its reputation (how a bank affects the behavior of the depositors), the relationship between the bank reputation and its scales and the interest rate of the deposits and the explicit the deposit-insurance (the institutional factor). The chapter 5 deals with the choice of the bank reputation under the different market structures and the effect of such choice on the qualities of bank assets. The main conclusion is that inthe diversified market, the difference of bank reputation leads the transfer of risk among the different banks. The quality of bank asset is developed by the hard reputation and the quality of bank asset is decreased by the soft reputation. This point is important for the bank reform in the transitional countries. The Chapter 6 systematically studies the effects of government monitoring on the bank reputation and the effects of bank reputation on the effectiveness of government monitoring under the framework we develop in the previous analysis.The third part is the empirical study that includes the chapter 7 and chapter 8. The main concerns are the problem after we access to WTO and reform order of the bank sector and the policies in the central planning economy and the transitional economy. In the process from the central planning economy to the market economy, On the one hand, the government restricts the bank behavior to get a good reputation for the sate-owned bank sector to organize the national saving. On the other hand, the reform requires that the bank reputation assured by the national reputation should be transferred to the reputation form the market to increase the effectiveness of bank operation. They are the contradictive aims in some degrees. The government takes the financial policies such as single-ownership system, strict market access and the lagged information declare. The aim behind the previous policies is to keep good reputation for the bank sector but pays high costs. We think that the competition from the foreign banks may increase the instability of the whole bank system. And in the process of bank reform, we should pay more attentions on the reform order and the risk of instability form the reform. Our suggestion is that the bank reform should be done systematically and orderly.The fourth part is the Conclusion of the paper. We discuss the main conclusions of our research and possible development of the research. In the end, we make a perspective studies on the field.