Essays on Financial Reform, Regulation and Dynamic Efficiency of Commercial Banks from Taiwan or China’s Perspective

• Main Authors: Chih, Shu Hwa, 遲淑華
• Other Authors: Lee, Tung Hao
• Format: Others
• Language: en_US
• Online Access: http://ndltd.ncl.edu.tw/handle/hg6vxr

博士 === 國立政治大學 === 金融研究所 === 101 === The Financial Restructuring Fund provides a bank make the important decision of whether to merge the problem bank, through the market mechanism. To protect shareholder equity, the obligation of bank management and the board of directors in the merger process are important.The study examines how the financial restructuring scheme affects corporate governance of acquiring banks under or without the restructuring scheme, and whether corporate governance makes a difference in static and dynamic efficiency for bank mergers during implementation of the Financial Restructuring Fund Statute in Taiwan. The goal of financial regulation is to enable banks to improve liquidity and solvency. Stricter regulation may be good for bank stability, but not for bank efficiency. This research aims to explore how the previously implemented financial regulations have affected bank efficiency in the past. In addition, we also explored the trade-off relationship between efficiency and risk. Unlike other literatures only investigating the characteristics of corporate governance (bank regulation) that affect the concurrent static efficiency of bank, we further use dynamic slacks-based measure (DSBM) to study the persistent and intertemporal effects on the dynamic efficiency of bank in the long run. In addition, this study used bank assets as a classification standard from the financial risk and differential regulatory perspective. Our results show that major shareholders of acquiring banks had greater controlling power to decide whether to merge during the financial restructuring period. During the financial restructuring period, a bank merger using the financial restructuring scheme had less static and dynamic efficiency in the short run, but gradually increased in the long run. Such an observation is consistent with the hypothesis that controlling shareholders pursue long-term efficiency in a bank merger. The ability to control risks and asset quality for large and small banks is different. The large banks have greatly enhanced the ability to resist risk and identify the customer to whom to lend funds. In addition, the large banks should pay more attention to the cost of control than small banks should. The purpose of CBRC regulates the current ratio is to reduce the risks of banks. Based on our empirical results, the current ratio did not affect the risks and led to different efficiency results between large and small banks. We also find the capital adequacy did not a significantly affect bank’s static efficiency. It seems the new capital requirements may not swallow their profits and lead to a decline in return. To attain the requirement of Basel III, China commercial banks must change the profit model which depends on expand the scale of assets and purse the transformation of business development. From the risk-prevention point of view, the CBRC should adopt differentiated financial regulation policies for banks of different asset sizes according to the operating status.