The Effects Of Promotion Pressure And Characteristics Of Officials On Lending Activities Of City Commercial Banks In China

With the continuous reform and innovation of China’s financial system, the development of city commercial banks have also made remarkable achievements. By the end of2012, the number of China’s City Commercial Bank has developed to144, with3375000employees, total assets amounted to12.35Trillions, ranking second only to large state-owned banks and joint-stock banks. By reviewing the history of the development of city commercial banks we found that The city firm on the local government mark is deeply branded in the beginning.At the same time, because of our country local official assessment mechanism Attach too much importance to economic performance, that will accumulate local government short-term economic development pressures. The local officials’ promotion incentive based on the pressure will also pursue excessive economic development indicators, This will cause the local officials for the promotion and competition of economic growth pattern. The Natural holding the position of government in the city commercial banks in the economy has just for convenience to alleviate pressure to develop local officials promotion, Especially weak in local government financing channels are limited, fiscal revenue to reduce and control force of state-owned bank predicament, the local government officials through the platform activities of the city commercial bank loans will be more obvious. Not only that, the different characteristics and preferences of local officials will cause a certain impact on the city commercial bank credit allocation.The local government holdings of city commercial banks has been the focus of debate in the industry, most of the research are stuck in the study of government ownership property effects on the city commercial banks operating performance, but the local government effects on city commercial banks have never been promoted to the official individual level. What kind of relationship between local officials and City Commercial Banks is there? Whether the different characteristics of local officials will lead to different loan activities? This paper will be based on the official political promotion perspective and the data of The91 city commercial banks in China2010, By constructing the official promotion pressure index and the official index to study the influence of local officials of the city commercial bank loans to total loans and loan risk, industry credit index. And we also study of the formation mechanism of city commercial banks non-performing loan and how to fix the official assessment index to weaken the effect of noise, offering the certain reference significance to the reform of city commercial banks in the transition period.At the beginning, we review all domestic and foreign theories about government shareholders of city commercial banks. We found from the academic circles about the influence of the government, shareholders of the city’s business can be divided into two categories. Although the academic circles for the advantages and disadvantages of local government holding city commercial bank results are divergent, they are of the view that government ownership for city commercial bank is the universal existence.In the empirical part, we gets nearly120city business data by the way that query website and newspaper, finally we choice of91city commercial banks as the sample of this paper. In the construction of the empirical model, we selects9explanatory variables to the loan activities of city commercial banks, and we use three indexes to describe the activities of City Commercial Bank, they are loan industry, loan risk and the loan amount. Through the results of regression model, this paper came to the conclusions:(1) the local officials that with higher promotion pressure will intervene the City Commercial Bank credit allocation, and this Ultimately make the formation of bad loans. it’s bad for the stability of financial market development.(2) The introduction of foreign investment and Achieving regional operation can improve the quality of bank loans.(3) The consults of this study supports the ideathat government intervening is not conducive to the development of City Commercial Bank.(4) City commercial banks should pay more attention to equity governance in the future reform, and our government should accelerate the innovation of financing platform.