Analysis Of The Effect Of Preferred Bank Financing Of China’s Commercial Banks

In recent years,China’s financial reform process has accelerated.Especially after the full liberalization of loan interest rates in 2013,the bank’s deposit-loan spreads have narrowed.In addition,competition between the Internet and other channels has reduced the profitability of commercial banks,and how to maintain sufficient capital.It has also become a bottleneck for commercial banks.At the same time,Basel III and the Capital Management Measures of Commercial Banks put forward higher requirements for commercial banks on the scale of capital.Commercial banks urgently need to supplement capital through innovative financing methods.And March 21,2014.The CSRC issued the “ Measures for the Pilot Management of Preference Shares”,which clarified the conditions for issuance,the method of issuance,and the conditions for transactions and conversions.Since then,the issuance of preferred shares has been legally guaranteed.Due to the high threshold for the increase of common stocks,there is also the possibility that control rights will compete for contradictions.The way to use other Tier 1 capital instruments to expand capital is also flawed.Therefore,many commercial banks have begun to use the method of preference stock financing to supplement capital.In view of this,firstly,this paper sorts out the current situation of preferred stock financing,and analyzes the problems and reasons of current preferred stock financing.Then,this paper focuses on normative analysis,combining theoretical research with case studies,with a focus on analyzing the effects of preferred stock financing on commercial banks.In the analysis of internal effects,this paper chooses the three aspects of capital structure,profitability and corporate governance to compare the preference stocks before and after financing.In terms of external effects,this paper uses event research method to analyze the stock price of secondary market before and after commercial bank preferred stock financing.Change and impact on investors.Through the analysis of the effects of commercial banks and the effects of external parties,this paper concludes that preference stock financing has a positive effect on the operation of commercial banks.Finally,combined with the current problems of preferred stock financing and the positive effects on commercial banks,this paper proposes policy recommendations for improving the preferred stock financing from the regulatory authorities,the banks themselves and the investors,with a view to further promoting preferred stocks.Proper use and steady development of thepreferred stock system.