Research On Combinatorial Auction Theory Applied In Bank Non-performing Assets Disposal

Non-performing assets of banks in the world are universal, and it is a harmful problem. There are also a huge non-performing assets in China's banking industry. Non-performing assets of the banking sector hindered the further development of China's banking industry, but also a serious impact on the operation and growth of our national economy. As the non-performing assets has a "popsicles effect" on the treatment of a high speed and efficiency requirements. In order to maximize the prevention of the loss of bank non-performing assets and improve the efficiency of the disposal of non-performing assets, we must find a suitable method to dispose non-performing assets. This paper focus on the characteristics of non-performing assets and finding more appropriate disposal methods to improve the speed and efficiency of disposal to prevent the loss of bank non-performing assets.This paper describes the combinatorial auction theory and auction model which is foundation of the discussion below. And then analyzed the causes of non-performing assets: institutional factors, the bank's internal factors and enterprises factors. Then analyse the reason of formation of non-performing assets of China's banks and the methods of disposing of non-performing assets: legal recourse, the bank's internal verification, debt-equity swap, non-performing asset securitization and general auction. On the basis of comparison of these methods take the theory and empirical way to prove that a combinatorial auction will be used to dispose non-performing assets that are complementary. According to the actual situation, combinatorial auction model should be extended and introduce three variables: xp: bid, xq: Bidders credibility and xr: allocation of non-performing assets disposal efficiency to establish multi-attribute combinatorial auction model of non-performing assets. We can make a conclusion through simulation examples of the test that multi-attribute combinatorial auction model can obtain a higher utility than combinatorial auction model that only concern about price. This is the greatest innovations in this article. Finally, we make policy recommendations on how to speed up the disposal of the non-performing assets and guard against new of non-performing assets. The significance of this paper is: a way of innovation for non-bank non-performing assets disposal in order to improve the efficiency of the disposal of non-performing assets.