A Study On Market Withdrawal Mechanism Of China's Commercial Banks

Recently, China's financial institutions are developing quickly. Government owned commercial banks and municipal commercial banks had completed the shareholding reformation, their shareholdings structure are complicate more and more, at the same time ,some micro-bank and micro-financial institutions emerged recently, these institutions are too weakness in risk regulation to bankrupt. So, China's government or financial supervise institutions should explore a propel bank withdrawal mechanism which is fit the market-directed economy.Basing on financial risk theories, this paper investigates the influence of commercial bank withdrawal form market, analyzes the withdrawal mechanisms of different countries. Through recall China's commercial bank withdrawal history, the author gives some proposals on bank withdrawal problem, detail as follows:1. Commercial bank withdrawal mechanism is a complicated systems engineering. Government should give up the 'discretionary policies' in Problem Bank regulation, but to try some new financial innovation mechanisms, and employ some market power to solve the crisis.2. Design an early warning system and the emergency response mechanism for risk. Collecting risk information about liquidity risks, credit risk, operate risk and markets risk, at same time, send these information to regulators to forecasting the risk change exactly, so the regulators could choice the propel disposal means ,according the feature of risk.3. Design a withdrawal mechanisms basing on principles of circumspect and market, such as set up a deposit insurance system to assure the security of withdrawal. Formulate the conditions to close, dismiss, and repeal financial institutions.4. Setting up a deposit foundation. Its means provide a spokesman for investors, this spokesman would supervise the behavior of banks, and on the other hand, it could protect the interest of investors, avoiding the spread of risk.5.Government should improve the ecological environment of financial development and establish a financial system adapting market economy, at same time, we should pay more attention to propagate financial knowledge, helping the depositor to form banking crisis consciousness, improving their risk tolerance of bankruptcy, all of these have great means for finance market construction.