China's Commercial Banks To Subprime Risk Resilience

As a financial tool of the commercial bank to run in to debt forwardly, subordinated debt has been received abroad recognition and favor in the international banking for the recent years, and it has played an important role in commercial banks' stable running and continual development. With the reinforcement of supervising of our commercial banks' capital, the minimum line of capital adequacy has gradually become the limitation of banks' rapid expansion and banks are suffering from the lack of capital as well as the absence of supplying channels. So allowing banks to issue SND opens a new way for banks to acquire capital continually and conveniently.This dissection focuses on the study of SND, On the base of chapter 2 summarizing the related documents at home and abroad, the charter 3 first discussed the characteristics of the subordinated debt as a new financing tool, especially comparing it with equity and debt in the operational mechanism of market discipline; Next, we analyzed in detail the designed characteristics of the Chinese banks' subordinated debt which could influence its role of market discipline, including mainly the arrangement of issuing time, pricing and investors and etc, and then introduced the designed characteristics of subordinated debt in the selected developed countries and zones and compared their similarities and differences for using as a source of reference for China. On this basis, elaborate the risk resistance of banking subordinate debt from shareholders, subordinate debt holders and subordinate debt capital.In the part of empirical research, Eviews5.0 Using Least Squares (OLS) is adopted. 34 samples of subordinated debenture from 13 banks in Chinese from 2004 to 2009 will be collected as a cross-sectional data. Non-performing loans ratio, the capital adequacy ratio, size distribution and distribution of the period are extracted respectively to verify the ability of commercial bankers to resist the risk of subordinated debenture. After investigating the relationship between the subordinated debenture and margin, and the empirical findings in Sino-US junior bonds interest margin-venture module. Empirical evidence and experience of the ability of Chinese commercial banks against the risk of subordinated debt is to be verified. At the last part, some policy-oriented proposals are suggested on promoting the ability of commercial banks to resist the risk of subordinated debt.