Banking in China: Second Edition (Palgrave Macmillan Studies in Banking and Financial Institutions)

Cover......Page 1
Contents......Page 8
List of Tables......Page 12
List of Figures......Page 16
List of Abbreviations......Page 17
Introduction......Page 21
Part I: Overview......Page 24
1.1 Historical developments......Page 26
1.2 Organisation and structure of the banking landscape......Page 28
1.3 Growth of the Chinese banking system......Page 30
1.4 Reform of the Chinese banking sector......Page 33
Part II: Infrastructure and the State......Page 40
2.1 Regulatory authorities......Page 44
2.2 Regulatory instruments......Page 51
2.3 Chinese regulations and BCP – A comparison......Page 63
3.1 Deposit insurance......Page 65
3.2 Bankruptcy......Page 68
4.1 The financier......Page 73
4.2 The businessman......Page 75
4.3 The employer......Page 76
5.1 Pervasiveness of the state......Page 79
5.2 Rationale for state interference......Page 82
5.3 Private monitoring functions......Page 83
5.4 State interest view......Page 86
5.5 Does the current regulatory arrangement lead to more risk-taking?......Page 88
5.6 Balance between centre and periphery......Page 89
Box 1 The role of peripheral private and independent arrangements: foreign investors......Page 91
Conclusion of Part II......Page 95
Part III: Demand......Page 98
6.1 Definition and measurement......Page 102
6.2 Financial intermediation and financial infrastructure......Page 103
6.3 Enterprises financing......Page 105
6.4 Informal financial intermediation......Page 110
Box 2 Credit registry......Page 113
7.1 Microfinance and rural......Page 115
7.2 Retail lending......Page 120
Box 3 Interbank bond market......Page 126
Conclusion to Part III......Page 128
Part IV: Supply......Page 130
8.2 Historical developments and business scope......Page 134
8.3 Shareholding structures......Page 137
8.4 Governance and transparency......Page 138
8.5 Financial performance......Page 142
8.6 Challenges ahead......Page 144
9.1 Market shares and coverage......Page 146
9.2 Historical developments and business scope......Page 147
9.3 Shareholding structures......Page 148
9.4 Governance and transparency......Page 149
9.5 Financial performance......Page 151
9.6 Challenges and opportunities......Page 153
Box 4 Public–private oversight mechanism: Central Huijin Investments Co.......Page 154
10.2 Historical developments and business scope......Page 156
10.3 Shareholding structures......Page 157
10.5 Financial performance......Page 158
10.6 Challenges ahead......Page 160
11.1 Market shares and coverage......Page 161
11.2 Historical developments and business scope......Page 163
11.3 Shareholding structures......Page 166
11.5 Financial performance......Page 167
11.6 Challenges ahead......Page 169
Box 5 Postal savings......Page 162
Conclusion to Part IV......Page 172
Part V: Risks......Page 174
12.1 Estimating the level of NPLs......Page 178
12.2 Classification standards for NPLs......Page 180
12.3 Reasons for the emergence of NPLs......Page 183
12.4 Resolving the NPL issues......Page 184
12.5 New loan quality......Page 187
12.6 NPLs and systemic risk......Page 193
Box 6 AMCs and NPL sales......Page 195
Box 7 Trust loans and loan transfers......Page 198
Box 8 Local government financing......Page 201
13.1 Capital adequacy......Page 204
13.2 Basel I in China......Page 206
13.3 Basel II in China......Page 210
13.4 Basel II-compliant regulations in China......Page 213
13.5 \'Basel III\' in China......Page 214
13.6 Current state of risk management systems in Chinese banks......Page 216
13.7 Impact of the Basel II Accord......Page 218
14.1 General remarks......Page 221
14.2 Corruption......Page 223
14.3 The corporate governance regulatory framework in China......Page 225
14.4 Corporate governance in Chinese banks......Page 227
14.5 State ownership and corporate governance......Page 232
Box 9 Compensation of bank executives in China......Page 233
15 Chinese Banks and the Wider World......Page 235
15.1 Entry to the World Trade Organization......Page 236
15.2 Entry of Chinese banks into the world......Page 241
15.3 Lessons from the crisis......Page 243
16.1 Macroeconomic environment......Page 247
16.2 Current bank-level data......Page 249
16.3 Scenarios for stress testing......Page 252
16.4 Stress test results......Page 255
Conclusion of Part V......Page 257
Annexes......Page 258
Notes......Page 294
Bibliography......Page 313
Index......Page 346