Basel Accord And The Study About The Capital Adequacy Ratio Management Of Commercial Bank

The management of Capital Adequacy Ratio (CAR) is an important criterion of "Security" of "the Three Characters" in commercial bank management. It is more than 15 years of the international supervise of the commercial bank from that it is regulated that Capital Adequacy Ratio should be higher than 8% in the International Convergence of Capital Measurement and Capital Standards 1988(Basel Accord 1988) to the New Basel Accord 2004 regulated that the Capital Adequacy Ratio be one of the "Three Pillar". Basel Accord and the related supervise regulars bring important effects to the worldwide commercial bank supervise. Chinese government promulgated the measure criterion of the Capital Adequacy Ratio and brought the CAR into supervisal in 1993. Commercial Bank Law of P.R.C that promulgated in 1995 regulated that CAR should be higher than 8%."Commercial Bank Capital Adequacy Ratio Management Method" promulgated by the Supervisor Committee of Banks perfects the management of CAR. But CAR management of Chinese banks hangs behind greatly compared with the great international banks and the 4 big national banks do so especially. They hardly accord with the requirements of the 2004 Basel Accord. There are many difficulties to obey with the requirements of the 2004 Basel Accord for the 4 big national banks. Besides of them there are two points are conspicuous. One is that is more difficult to get the minimum CAR 8% and the other is that the national banks hardly adopt the Internal Rating-Based Approach (IRB) that is advocated by the Basel Committee.Firstly this paper introduces some concepts about the CAR and the Basel Accord. Then it analyses the two difficult points about the 4 big national banks to implement the 2004 Basel Accord. Thirdly it brings the methods about how to enhance the CAR before and the strategy about how to carry the IRB into effect. This paper designs the projects about how to complement the 4 big national banks' capital aim at the fist difficult point. And through the linearity regression analyses this paper finds the amount of capital of the 4 big national banks that need to be complemented in 15 years. This paper emphasizes to analyses the feasibility of the projects of returning or depressing the sales tax, to issuance thelong time finance bonds and to come to the stock market. Aiming at the difficult point that the 4 big national banks can hardly adopt the IRB this paper analyses the two obstacles: the technological obstacle and the system obstacle. And then gives the suggestions.The innovation of this paper is that it calculates the amounts of capital that the 4 big banks should be complement in 15 years through linearity regression analyses and gives the whole designs of how to implement the capital.