On The Theory And Practice Of Bank Capital Regulation

Banking, to whose development security and stability are the keys, plays an important role in finance industry and the whole national economy. Especially in today's financial liberalization and globalization, more and more countries are facing the problem of how to ensure the secure, stable and effective operation of banks. Since the 1970s, crisis in banking industry seems to have increased with the financial deregulation. Therefore, regulators began to search new supervising methods, which results in bank capital adequacy supervision. In real life, we can see that although each country has carried out banking deregulation in the financial liberalization process, capital adequacy supervision has been emphasized as the core factor of stability in the banking system. As the last safeguard of bank risks, capital has been attached the most importance in today's bank risk management. Banks take actions to undertake their own risks by owning more capital, which means their demand of capital is acted as the buffer to their risks.At present, western countries have formed a banking regulation mode which regards the capital adequacy as core while deposit insurance and lender of last resort system as safeguard. After the New Basel Capital Accord came out, bank capital supervision is experiencing a crucial period of reform in both academic research and practices. Facing the worldwide trend of enhancing capital regulation, China has constituted a series of laws and rules closely related to capital adequacy, and made historic breakthroughs. However, at the same time, we also should clearly realize the difference of the bank capital supervision mode between China and western developed countries. It is necessary for us to learn from western countries to found a bank capital supervision system conforming to the country's actual conditions.Based on the study of relevant theories and practices and also the national realities, the dissertation creates a model that analyzes and examines the commercial bank capital adequacy level from five aspects—corporate governance, external supervision, macro-environment, capital supply channel and loan outflow. The analysis comes to conclusions like guiding commercial banks in promoting their all-around reform, building up fine corporate governance structure, strengthening self-discipline and self-regulating mechanism, reducing the negative influence of the transitional banking on capital supervision, setting up practical regulation measures and deposit insurance policy. All the stated solutions are aiming at establishing bank capital regulating framework of our own and making it a powerful tool to maintain Chinese banks'secure, steady and effective operation.