Design A Capital Adequacy Ratio Management Program For A Bank In Changsha

Sufficient capital is the precondition for establishing and running thecommercial banks and also an important cornerstone of the sustainable and stabledevelopment of the commercial Banks. What’s more, it’s the last line of defense forresisting all kinds of risks and losses in commercial Banks. After the outbreak of theinternational financial crisis, bank regulators around the world get down to reformingbank supervision so as to safeguard the stability and safety of the banking system insuccession. As a result,” Basel Ⅲ " has been the product of the international financialcrisis, as well as the important achievement of international financial regulationreform. China banking regulatory commission also promulgated the Chinese versionof Basel Ⅲ in June2012-"commercial bank capital management approach (trial)"(hereinafter referred to as the "capital method").Whether foreign or domestic bankregulators proposed higher demand of capital adequacy of commercial bank, thusincreased further pressure on banks to supplement capital. Compared with thestate-owned Banks and national joint-stock commercial Banks, a bank of Changshacity which belonged to small and medium-sized city commercial bank was facing witha bigger problem about capital constraints, and difficulty in financing. Therefore, theincreasement of bank capital resource and adequacy rate of capital is the key of thecapital management of the bank of Changsha at present, as well as an importantguarantee for the stable and sustainable development of bank.First in this paper, with the method of comparative analysis, the writer outlinesthe evolution of bank capital regulation policy at home and abroad and the theirdevelopment course, and illuminates the policy environment and background whichthe commercial banks in China were facing with. Then, using the collected financialdata and other information of the bank of Changsha, the writer used the qualitativeand quantitative analysis method to study the status quo of capital adequacy ratio ofthe bank. Finally, under consideration of the actual operation and management abilityof the bank in Changsha and its status quo, researcher made full use of the advancedcapital management methods and technology of the domestic and foreign well-knowncommercial bank to design the targeted and feasible management plans for improvingthe capital adequacy ratio of the bank of Changsha in this paper.Under the circumstances of increasingly strict bank capital regulation, slow Banks’ capital endogenous growth and increasement of risk assets size, if the bank ofChangsha wanted to expand the scope of business and seek long-term development, itis necessary to enhance the capital strength, improve the level of capital adequacyratio. For this purpose, the bank should adopt the strategy of a combination ofnumerator and denominator. That is to say, on the one hand, it should expand bankcapital sources by endogenous and exogenous financing path to increase total capital;On the other hand, reduce the growth rate of the risk-weighted assets by strengtheningthe management of risk assets. In addition, the formulation and implementation ofrelevant supporting measures were very necessary, such as adjustment of theperformance appraisal mechanism, establishment and improvement of the datainformation management system, a clear department division of labor, etc.This papertries to improve the Changsha a bank’s capital adequacy ratio, strengthen bank capitaland capital management ability, finally realizes the Changsha sustained, stable andhealthy development of a bank through the formulation and implementation of thesemeasures.