Can The Merger And Reorganization Of City Commercial Banks Reduce The Intervention Of Local Governments?

The fundamental task of financial work is to prevent and defuse financial risks,especially to prevent the occurrence of systematic financial risks.Since the reform of the tax sharing system in 1994,the financial system of "collecting financial power and devolving administrative power" has been formed,which has made the local government’s fiscal expenditure far greater than its fiscal revenue,and the financial pressure is increasing.Due to the particularity of CCBs,local governments constantly intervene in CCBs.This paper will focus on the following two issues:(1)Will the local government’s financial pressure prompt the local government to intervene in the operation of CCBs and reduce their operating performance?(2)Whether the joint reorganization can enhance the operational independence of CCBs and reduce the intervention of local governments?Based on the review of relevant research literature at home and abroad,this paper empirically analyzes the impact of local government intervention on the operating performance of CCBs,as well as the effect of joint restructuring of CCBs on reducing local government intervention.The research finds that:(1)The financial pressure of local government will reduce the operating performance of CCBs,and the impact effect has the heterogeneity difference of bank types,among which the four major banks are the least affected,and CCBs are the most affected;(2)The joint reorganization of CCBs will increase their operational independence,reduce the intervention of local governments,and improve their operational performance.The effect of reducing intervention exists in the heterogeneity of regions and joint reorganization methods;(3)The reduction effect of joint restructuring on local government intervention is mainly through the channel of reducing the income cost rate of CCBs,and is subject to the pressure of local government economic growth and the adjustment of the industrial structure of prefecture level cities.Finally,according to the above empirical conclusions,this paper proposes to improve the corporate governance structure of CCBs at the level of banks,continue to promote the regional joint restructuring reform of municipal CCBs,and constantly explore new innovative joint restructuring reform models,so as to improve the operation and management level and profitability of small and medium-sized banks such as CCBs.At the government level,we should continue to deepen the reform of the financial system,balance the financial rights and powers of local governments,increase government financing channels,and weaken the GDP oriented performance appraisal mechanism.