Research On Luliang City Banking In Structure Conduct And Performance

As the core of the financial system, banking connects closely to every aspect of national economy. In recent years, banking industry made a great contribution to economic and social development of Lvliang City.Based on the theory of market structure-conduct-performance mode, the paper mainly analyzes Lvliang's banking structure, conduct and performance. Study found that banking structure showed a low coverage in high degree. Barriers to enter or exit market pose restrictions on competition in the market, and product homogeneity led to vicious competition. Thus, its mostly inefficient market conduct resulted in waste of resources. Influenced by the former two elements, market performance shows low profit margins, low asset allocation and high credit risk. In order to efficiently promote a sound development of banking industry in Lvliang City, and based on a overall knowledge of this industry and policy background of China's banking sector, the paper presents Lvliang some countermeasures at two levels including operating and system levels. Banking institutions should optimize the unreasonable organizational system, change the extensive mode of development, and establish effective incentive and restrain mechanisms. For the system level, it is proposed to relax government regulations and property rights system to enhance the banking performance.The innovativeness of this paper lies in the distinction between banking industry's universality and individuality, which proposes suggestions to improve market performance in two levels, so that these measures will be better applied and operated.