Banking in China (Palgrave Macmillan Studies in Banking and Financial Institutions)

Cover......Page 1
Contents......Page 8
List of Tables......Page 13
List of Figures......Page 16
List of Abbreviations......Page 17
Introduction......Page 20
Part I: Setting the Stage......Page 24
1 Structure of the Banking System......Page 26
1.1 Historical developments......Page 27
Financial institutions......Page 28
1.3 Key indicators of the Chinese banking system......Page 31
Geographic scope......Page 34
Banking performance rankings......Page 35
1.4 Reform of the Chinese banking sector......Page 36
Allocation of resources and banking sector refo......Page 37
Current reform focus......Page 38
Part II: Financial Infrastructure......Page 42
People’s Bank of China......Page 44
China Banking Regulatory Commission......Page 46
Regulatory instruments......Page 47
Regulators’ independence......Page 49
2.2 Important commercial banking laws and regulations......Page 50
Prudential indicators......Page 54
2.3 Lending and deposit rates......Page 55
2.4 Credit registries......Page 57
2.5 Credit rating industry in China......Page 58
3.1 Deposit insurance......Page 62
Bankruptcy of enterprises......Page 64
Proceedings for banks......Page 65
Issues and constraints in current bankruptcy proceedings......Page 67
4.1 Financial influence......Page 69
4.2 Influence on decision-making......Page 70
4.3 The role of the regulators......Page 73
4.4 Rationale behind the influence of the state......Page 74
5.1 Historical developments and rationale behind entry......Page 76
5.2 Critics to the introduction of foreign shareholders......Page 82
5.3 Foreign investors’ environment......Page 83
Conclusion......Page 86
Part III: Specific Issues......Page 88
6.1 Definition and measurement......Page 90
6.2 Financial intermediation and financial infrastructure......Page 93
6.3 Enterprises financing......Page 95
State-owned enterprises......Page 96
Private and collective enterprises......Page 97
Importance of banks in financing enterprises......Page 99
6.4 Informal financial intermediation......Page 100
7 Non-performing Loans......Page 104
7.1 Estimating the level of NPLs......Page 105
7.2 Classification standards of NPLs......Page 106
7.3 Reasons for the emergence of NPLs......Page 107
7.4 Resolving the NPL issues......Page 109
7.5 New loan quality......Page 112
7.6 NPLs and systemic risk......Page 116
8.1 Capital adequacy......Page 119
8.2 New capital adequacy rules......Page 121
8.3 Chinese regulations and international standards – A comparison......Page 125
8.4 Current state of risk management systems in Chinese banks......Page 126
9.1 Corruption......Page 129
9.2 Corporate governance......Page 131
9.3 Corporate governance regulatory frameworkin China......Page 134
9.4 Corporate governance in Chinese banks......Page 136
9.5 State ownership and corporate governance......Page 137
Conclusion......Page 140
Part IV: Analysis of Different Bank Types......Page 142
10.3 Ownership and enterprise forms......Page 144
10.5 Geographic and business scope......Page 146
10.6 Management......Page 147
10.8 Challenges and opportunities......Page 148
11.2 Market share and position......Page 151
11.5 Specific regulations and authorities......Page 153
11.8 Financial performance......Page 154
11.9 Challenges and opportunities......Page 155
12.2 Market share and position......Page 158
12.3 Ownership and enterprise forms......Page 159
12.4 Historical developments......Page 161
12.6 Geographic and business scope......Page 162
12.7 Management......Page 163
12.8 Financial performance......Page 164
12.9 Challenges and opportunities......Page 165
13.3 Ownership and enterprise forms......Page 168
13.5 Specific regulations and authorities......Page 169
13.6 Geographic and business scope......Page 170
13.9 Challenges and opportunities......Page 171
14.1 Key indicators and figures......Page 173
14.3 Ownership and enterprise forms......Page 174
14.4 Historical developments......Page 176
14.6 Geographic and business scope......Page 177
14.8 Financial performance......Page 178
14.9 Reform of RCCs underway......Page 179
14.10 Challenges and opportunities......Page 180
Conclusion......Page 184
Part V: Future Challenges......Page 186
15 Retail Banking......Page 188
15.1 Credit card lending......Page 190
15.3 Real estate lending......Page 192
16 Impact of the New Capital Accord......Page 194
16.1 Rationale and incentives behind the current implementation schedule......Page 195
Regulators’ incentives......Page 196
Banks’ incentives......Page 197
16.2 Further implementation of Basel II......Page 198
Impact on capital requirements......Page 202
Impact on costs structures in Chinese banks......Page 206
16.4 Qualitative impact of the Basel II accord......Page 208
16.5 Impact of Basel II on the Chinese banking system......Page 211
17.1 Chinese commitments......Page 214
Compliance progress in the banking sector......Page 215
Other barriers to foreign banks’ entry......Page 219
National treatment for all......Page 221
17.2 Impact of foreign entry on emerging markets......Page 222
Likely response of foreign banks......Page 223
Likely response of Chinese banks......Page 226
17.4 Impact of WTO entry on the banking system......Page 228
Conclusion......Page 231
Part VI: Conclusion......Page 232
Annexes......Page 236
Notes......Page 270
Bibliography......Page 281
Index......Page 313