Research On The Influential Mechanism Of State-Owned Commercial Bank's Economic Capital Management Based On Financial Environment Constraint

With operating risk often defined as its essence, the survival and development of commercial banks relies mostly on good risk and capital management. Therefore, reasonable capital allocation, improvement of risk management and maximization of business value are the ultimate objectives of commercial banks. On this background, a banking business management model centering on economic capital management has become a new tool for commercial banks to realize their value maximization. Even though there are many existing literatures on this subject, they mostly focus on metrology with the following problems. First of all, studies of economic capital management from economic capital itself lead to insufficient research on antecedents of its influential mechanism. They theoretically demonstrate the existence of economic capital management from Basel Agreement and regulatory policies, rather than research it in the financial environment, and the fact that the implementation of economic capital management is the necessity of financial environment changes has not been taken into consideration. Secondly, there is lack of systematical and quantitative studies on influential mechanism of commercial bank's economic capital management based on financial environment constraint, and there is lack of quantitative researches and analyses on the influential mechanism, direction and intensity of financial environment constraint factors. Thirdly, studies on the economic capital and the economic capital management from existing literature concentrate mostly on certain metrological technology while studies on how to measure the influential mechanism of commercial bank's economic capital management remain a fade zone.In view of this, the dissertation tried to put forward the influential mechanism of state-owned commercial bank's economic capital management based on financial environment constraint for the first time, analysed mutual connection, interaction rules and principles between each factor of financial environment constraint and the economic capital management of state-owned commercial banks in certain conditions. Then based on literature research and banking practice, it proposed the research hypothesis, built the theoretical model about the influential mechanism of state-owned commercial bank's economic capital management based on financial environment constraint, made an empirical analysis on the the theoretical model. The main research contents and conclusions of the dissertation are as follows:Firstly, through the method of literature research, case study, expert panel discussion and open questionnaire we developed "state-owned commercial bank's economic capital management measurement table". After a small-scale pretest and a wide range of survey about data analysis, it shows that the developed measurement table of the dissertation has good reliability and validity. At the same time, methods and results of the measurement table development also has a certain theoretical value and application value. It will have a guiding role and reference value for the future development of the state-owned commercial bank's related follow-up studies.Secondly, through the association analysis on financial environment constraint and state-owned commercial bank's economic capital management, we revealed that the influential mechanism model of state-owned commercial bank's economic capital management in the view of financial environment constraint includes six dimensions. It respectively refers to the financial market environment, regional development environment, social and economic environment, financial product and service providers, consumers and regulators. Among them, the financial market environment includes two variables, which are the financial market concentration degree and the financial market competition degree. The regional development environment includes two variables, which are the regional financial deepening degree and the regional institution and policy environment. The social and economic environment includes two variables, which are the social industrial structure and the social economic efficiency. The financial product and service providers include two variables, which are the corporate culture and the operating benefit. The financial product and service consumers include two variables, which are the diversity of demand and the credit degree. The financial product and service regulators include two variables, which are the constraint of regulatory policies and the norms of internal control. Through researching the relationship between "the six basic characteristics" of state-owned commercial bank's economic capital management and "the six major factors" of financial environment constraint, it fully demonstrates the implementation of economic capital management in the state-owned commercial banks is the inevitable result of the financial environment development and change.Thirdly, through the exploratory factor analysis and confirmatory factor analysis on empirical study, we measured the influential direction and intensity about the financial environment constraint factors on state-owned commercial bank's economic capital management. Based on the empirical study, we may come out the conclusions:point one, the financial market concentration degree, the financial market competition degree and the regional financial deepening degree is the important external factors in influencing the operating benefit of state-owned commercial banks. Point two, the social industrial structure and the social economic efficiency on the operating benefit of state-owned commercial banks have no direct influence. Point three, the regional institution and policy environment, the diversity of demand and the credit degree of consumers, the constraint of regulatory policies and the norms of internal control is the important external factors in influencing the corporate culture of state-owned commercial banks. Point four, the corporate culture and the operating benefit of state-owned commercial banks is the important internal factors in the implementation of economic capital management. The empirical results show that the operating benefit makes the biggest influence on the implementation of state-owned commercial bank's economical capital management, that's to say, the better operating benefit the state-owned commercial banks have, the more power they will have in the implementation of economic capital management.