The Impact of Bank’s Ownership on Its Prudential Behavior – An Evidence of China
Date Issued
2016
Date
2016
Author(s)
Chen, Ting-Yu
Abstract
State-owned commercial banks in China underwent shareholder reform after 2003. The process included inviting institutional investors, strategic investors and public investors and reforming company’s governance. After that, state-owned commercial banks became large commercial banks. At the end of 2014, there were 5 large commercial banks and 12 joint-equity banks in China which consist the main banking system. Reviewing the results of bank privatization in developing countries, banks didn’t always perform well. Because of that, this thesis use bank prudential behavior as a measurement to observe the effect of privatization, and the conclusion is, from 2008 to 2014, large commercial banks’ level of prudence is poorer than joint-equity banks’. Using 16 banks listed in A-stock, including 5 large commercial banks, 8 joint-equity banks and 3 urban commercial banks, to examine whether large commercial banks would be affected by government policies or not during financial crisis. In order to boosting economy growth, Chinese government asked banks to lend to assigned industries. Although 5 large commercial banks wasn’t 100% owned by the Chinese government, their lending behavior has been deeply controlled by the government. Surprisingly, joint-equity banks, which most of the shareholders were national enterprises, weren’t affected by the policy seriously.
Subjects
ownership
bank prudence
bank portfolio allocation
SDGs
Type
thesis
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