A Research On Economic Capital Management In China's Commercial Banks

Capital management in commercial banks has long been a matter to which commercial banks pay much attention, and also a crucial matter which Banking Supervision Department cares for. The bank capital, which provides permanent funds for commercial banks, is the prerequisite for the commercial banks'exist and the foundation for their development. If banks neglect capital management, the resulting crisis will cause losses in banks and businesses, and even bankruptcy, then triggering a series of social upheaval. In China's commercial banks,'Scale preference'is prevailing, which means a preference for increases in capital scale and extension of branches. That results in a high risk throughout the bank industry and a deviation from the requirements of international competition. So China's bank industry should improve risk quantification and strengthen capital management, which will play an important role in the steady operation of the financial system.To research into capital management in China's commercial banks, we should solute following problems systematically: What is the concept and category of capital in commercial banks? What are meaning, objectives, and contents of capital management in commercial banks? Why commercial banks choose economic capital as the core of capital management? How does the economic capital management works in commercial banks in China and abroad? What problems exist in economic capital management in China's commercial banks? What strategies should be set up to develop capital management in China's commercial banks? The thesis, building on relevant theories and their extension, integrating the theories and practices, will analyze the questions listed above one by one.Capital management in banks is a complex and systematic project, and application of economic capital management in China is a gradual process. The thesis is based on the research results of academic community in field of capital management, which compares the concept and category of bank capital, describes the meaning, objectives, and contents of capital management in commercial bank, analyzes the strength and weakness of each capital concept used in capital management in commercial banks, then draws a conclusion that economic capital is the best choice for capital management in commercial bank. The thesis also tries to provide some views and suggestions for economic capital management, on the basis of referring practices in commercial banks.