An Institutional Analysis On The Integration Of Industry & Finance Of Stated-owned Bank In China

Based on stock rights participation,personnel arrangement, the integration of industry &finance has become common features and necessary trend in modern market economic development, also a necessary road to establish new bank-enterprise relationship in China, it can reduce the transaction cost, remove asymmetrical information, optimize resources allocation, improve economic efficiency and satisfy the expansion,profitability,diversification of the capital. Compared to the traditional integration of industry &finance, modern integration of industry &finance doesn't only seek controlling rights, but also pursues scale expansion,investment diversification,risk avoiding. The deeper significance of the integration of industry &finance is to speed up the reform of property rights system,governing structure and operation model to cope with international competition.Four biggest state-owned commercial banks occupies 55% of the total banking assets, account for 57% of deposits in banks, provide 55% of all loans, bear 80% of social payment. However, due to the constraint of《law of commercial bank》, banks are not allowed to enter the business of securities and insurance, which makes state-owned commercial banks unable to use their capital to develop themselves on one side, under great pressure from enterprise in operation space on the other side. In addition, the excessive reform cost from other industries born by -owned commercial banks lead to low capital adequacy rate, high rate of bad assets and low rate of profitability. The integration of industry and finance provides good solution to these problems.This paper uses the integration of industry &finance in China as the research target, system change as logical order, compares and borrows international models of the integration of industry &finance: mainly market-oriented, all-round banking system, banking system and government-oriented, analyzes each model from two perspectives: 1.financing system and financial system, 2.the system of property rights and governance structures. This can accelerate the process of integration of industry &finance in Chinese state-owned commercial banks. The reform of China's state-owned commercial banks has stayed at the level of the operation mechanism without any deeper move towards property rights system, governance system and operating system for a long time. The integration of industry &finance of state-owned commercial banks was constrained by the one element property rights, the separated operating systems, administrative management system and an imperfect internal control system in the traditional mechanism. With the development of financial globalization and the end of the bank transition period of the WTO, in order to cope with international competition, we should steadily practice multi-element property rights, mixed operation mechanism and corporate governing mechanism, perfect risk management and inner control, which is not only conforming to bank reforms in market economic conditions, but also provides institutional basis for the integration of industry &finance.