Assessing The Efficiency Of Chinese Commercial Bank Considering Its Features Of Heterogeneity,Uncertainty,and Fairness

In recent years,with the increasing complexity,severity,and uncertainty of the domestic and international environment,China’s various policies have gradually established the new basis of "make economic stability our top priority and pursue progress while ensuring stability",which has brought China’s economic development into a new stage.Chinese commercial banks strive to implement the relevant requirements of the Party Central Committee’s decisions and regulations,adhere to.financial services for the real economy,take "High-Quality Development" as their theme,and support highquality economic development.As the core of China’s financial system,the new basis puts forward new criteria for Chinese commercial banks.The main task of Chinese commercial banks at this stage is to adapt and implement the national development strategy.The first step to ensuring the stable development of Chinese commercial banks is to evaluate their performance and identify any drawbacks in their operation processes.It is necessary to discover proper and effective ways to improve the performance of Chinese commercial banks.Throughout the current situation of the development of Chinese commercial banks,the total amount of non-performing loans of Chinese commercial banks has been increasing year by year,which poses a great safety hazard.Therefore,from the perspective of external management,the management of non-performing loans is an important breakthrough for Chinese commercial banks in improving their operating performance.According to the relevant policy documents on the management of non-performing loans in China,Chinese commercial banks adopt classification management for nonperforming loans,and different categories of non-performing loans have heterogeneity,and the losses of different categories of non-performing loans are unpredictable.From the perspective of internal management,the improvement of internal management is the cornerstone of commercial banks in resisting external risks.As an important part of Chinese commercial bank management,non-performing loan management often consumes a considerable amount of manpower and material resources.This indicates that the development of different stages within commercial bank internal management may cause imbalance and result in unfair phenomena.In summary,Chinese commercial banks exhibit three typical characteristics of heterogeneity,uncertainty,and fairness.Under the changing external environment,Chinese commercial banks need to combine external and internal management to systematically improve the overall operating performance of the commercial banking industry,starting with the above-mentioned three typical characteristics.Data envelopment analysis(DEA)is an effective operation evaluation management tool.By quantifying and objectively reflecting the performance of commercial banks through efficiency,this method is widely used to evaluate Chinese commercial banks’ performance.This study comprehensively and systematically evaluates the performance of China’s commercial banks in recent years from the perspective of external management and internal management,based on the features of heterogeneity,uncertainty,and fairness,using data envelopment analysis as the primary theoretical method.Based on the.evaluation results,this research provides a series of improvement suggestions for Chinese commercial banks.The main part of this study includes the following aspects.Firstly,the study focuses on evaluating Chinese commercial banks’ efficiency from the feature of heterogeneity.In published research,the evaluation mechanism often considers non-performing loans as a whole.However,according to policy documents of the People’s Bank of China,non-performing loans will be classified into various types according to risk.Different types of non-performing loans should be correctly included in the evaluation of Chinese commercial banks’ performance.Considering the heterogeneity of non-performing loans will help Chinese commercial banks and regulators deeply analyze the main factors that restrict the efficiency of Chinese commercial banks,and further provide a quantitative path for improving the operational efficiency of Chinese commercial banks.Secondly,the study evaluates Chinese commercial banks’ efficiency considering the feature of uncertainty.The operation of all commercial banks is accompanied by uncertainty,and bank gains or losses are often predicted with a range of forecasts.The input and output selections for the evaluation model of previous evaluation systems only consider the data to be exact and certain,failing to consider bank operation evaluation from the perspective of data uncertainty due to estimations or errors.Considering the uncertainty perspective of evaluating Chinese commercial bank operations will help Chinese commercial banks prevent risks themselves and facilitate regulators to adjust policies based on the overall risk level.This will promote the stable development of commercial banks and better serve the high-quality development of the real economy.Lastly,the study evaluates Chinese commercial banks’ efficiency considering fairness concerns.As a complex operation system,a commercial bank is usually regarded as a series system incorporating a deposit stage and a profit stage.This analysis starts with the bank’s internal management and considers the cooperative game and noncooperative game between each stage,constructs a fairness evaluation model,and ensures fairness between stages by constructing a utility function.This analysis can help Chinese commercial banks develop in a balanced way.The main contributions and innovations of this study are as follows:First,taking the heterogeneity and uncertainty of non-performing loans as the starting point,this study dicsusses the impact of the heterogeneity and uncertainty of indicators on the evaluation of Chinese commercial bank performance,enriching the theoretical system of Chinese commercial bank evaluation,and provide new ideas.Secondly,taking the internal management of commercial banks as the starting point,this study probes into how Chinese commercial banks do well in the balance and fairness of internal management when faced with changes in the external environment,giving several algorithms to help Chinese commercial banks deal with the complexity of evaluation for the proposed complex evaluation model.These tools provide new ideas for the internal management of Chinese commercial banks.Finally,based on the comprehensive and systematic evaluation results of Chinese commercial banks,this study provides a new perspective and policy recommendations for Chinese commercial banks to implement the overall strategy of "make economic stability our top priority and pursue progress while ensuring stability."...