The Research Of Risks Of Rural Commercial Banks In Our Country

Our country began to shareholding reform of rural credit cooperatives since2001from Jiangsu province, setting up three county-level rural commercial banks. Since then, all over the country, lots of rural commercial banks have built up to serve the local financial about "agriculture, rural areas and farmers". Rural commercial banks have also made great contributions to the local place:rural areas keep stability and agricultural keeps growing and farmers’ incomes has increased. The banks also raise the level of their own in the years of service.The ability of getting profit increased and their asset quality get better and their governance are improved substantially. We can say the " agriculture, farmer and rural area" and the progress of the rural commercial banks supplement each other. In December2010, Chongqing rural commercial bank listed in Hong Kong, which opened the prelude of rural commercial banks listed. Many rural commercial banks development more mature embarked on listing. Rural commercial banks are heading for a more dynamic and more competitive market.There are different classifications about our banks in our bank industry. However, whether state-owned banks or joint-stock commercial banks and urban commercial banks or rural commercial banks, as banks, essentially are organizations of business risks. They manage risks in order to obtain the risk-benefit. So in the changing financial environment and the fierce market competition, how to reduce and avoid the risk of themselves, has become an important problem urgently to be solved to all banks.Research topic of the paper is risks of rural commercial banks. In this paper, the main research methods are comparative study and empirical research based on factor analysis. Comparative study and empirical study mainly displays in two aspects. First, the research object of the paper is rural commercial banks, and they are organized by institutional change from rural credit cooperatives. The paper compared the property right system and management system before and after the institutional change. Secondly, when the paper discussed the risk of rural commercial banks, I take all the rural commercial banks as a whole. According to the theory of commercial bank’s risk, the index system which affect the risks about rural commercial banks are given, and then begin the empirical analysis of31samples based on factor analysis method for the risk of banks. In order to highlight the rural commercial banks in the banking system as a whole compared with the other type of banks in risks, this paper selected the five state-owned banks, five large joint-stock commercial banks and five city commercial banks and sixteen rural commercial banks to carry out overall analysis. Based on the factor analysis model, the multiple attribute dimension reduction, extract the main factors which affecting the banks’ risks. Their scores and ranking is given, then respectively to analyze the results about them. Finally based on the main risk factors of rural commercial bank risks and management experience combined with reality, I try to put forward suggestions from the micro level and the national bank system level for the rural commercial banks about risks aversion.This paper has five chapters, concrete structure and the contents are arranged as follows:The first chapter is introduction. Mainly expounds the research background and research significance of the paper, describing the institutional change about rural cooperation system in China and then introducing the research ideas and research methods of writing, the research method is comparative study, and empirical study. The innovation and inadequacies of the research are also included in this chapter.The first chapter is introduction. Mainly expounds the research background and research significance of the paper, describing the institutional change about rural cooperation system in China and then introducing the research ideas and research methods of writing, the research method is comparative study, and empirical study. The innovation and inadequacies of the research are also included in this chapter.The second chapter is the theoretical foundation and literature review. In the paper, the theoretical basis including the property rights theory and institutional change theory in institutional economics and bank risk theory in finance. Firstly the chapter has carried on a simple introduction about them. And then based on the purpose of the article, reviews and combs separately the research status at home and abroad about rural commercial bank risks.The third chapter is the risks about rural commercial banks under the institutional change. Firstly the chapter introduces the formation of rural commercial bank system, which is organized from its predecessor------rural credit cooperatives through institutional change. The property right system and management system has transformed before and after institutional changing, but institutional changes not once and for all, the risks after the formation of rural commercial bank system is the main content of this chapter which will be explored.The fourth chapter is based on the factor analysis to assess our country’s rural commercial bank risk. There are lots of index which affect risk of the rural commercial banks, including the non-performing loan ratio, loan-to-deposit ratio, cost income ratio, etc., but if every index are considered, econometric analysis has lost the meaning of existence, this chapter select some indicators affecting the risk of commercial banks, according to the correlation dimension reduction, select the main five factors, and then analyze the results.The fifth chapter is countermeasures and suggestions for avoiding rural commercial bank risks. According to the results of the empirical analysis in the fourth chapter, and combining the experiences of commercial banks risk-avoiding to put forwards comprehensive circumvent advice, these suggestions include both rural commercial banks themselves and macroscopic system of the national behavior.