The Government Of State-owned Commercial Bank Management Relations

Our financial business will open for foreign financial institutions in 2006.With the deadline getting close, four state-owned commercial banks are carrying out a plan to reform shareholding system. However state-owned commercial banks have not been free from administrative intervention. Government applies administrative intervention in macroeconomic regulation and has acquired good results in price of the interests of state-owned banks. As a result it is necessary to study the issue of weakening administrative intervention in operation of state-owned banks.Many methods are used such as the analysis of substantial evidence and standard, the inductive and deductive method. On the basis of property theories the author analyzes the present condition of administrative intervention for state-owned banks. Then the author compares the reform of shareholding system and corporate governance among Hungary, Australia and Germany, especially on means of regulating the ability of Government to intervene. From the above comparison, enlightenment is acquired and polices are introduced according to our present conditions.The Conclusion is that to solve the problem Government should formulate policies to improve outside environment and inside system for the stated-owned commercial banks. As far as outside environment is concerned, Government should strengthen public finance, improve market competition conditions, formulate and revise laws, and build good social security system. As far as inside system is concerned, Government should guide state-owned commercial banks to introduce multi-shareholders and build corporate governance system.