Mai Sgranpravc: The Development History OF Commercial banking

Development History

Originally used "commercial bank" concept, since such banks in the early stages of development, only what was "commercial" short-term lending business. Loan shall generally not exceed one year, and lends for businessmen and general import and export trade providers.

Such people will be absorbed mainly short-term deposits, issuing short-term commercial bank loans to the basic service, known as commercial banks. China's commercial banks is in accordance with " People's Republic of China Commercial Bank Law " and " People's Republic of China Company Law of deposits from the public," established. Loans. Apply for legal settlement and other business enterprises.

Bank is one of the most important economic institutions. Western banking original state back as BC ancient Babylon and ancient civilizations period. According to Encyclopedia Britannica records, as early as the sixth century BC in Babylon has been a "Righi than the" bank. [3]

Archaeologists discovered in the Arabian desert stone proved that before 2000 BC, the Babylonian temple has been the external loans, but lenders are similar to the use of promissory notes issued by the debtor instrument, which receives by the temple, and this instrument is for sale . 4th century BC, the Greek monasteries, public bodies, private firms, are also engaged in various financial activities. However, this activity is limited to currency exchange business nature, but also did not apply for business loans. [3]

Rome in 200 BC, the Greek banking sector has a similar mechanism occurs, but more Greek banks have made progress, it is not only carrying on money changing business, also operating grant loans, trust and other services, while the bank's management and supervision are also clear legal provisions. Roman banking business carried not belong to credit loaned, but already has banking operations in modern prototype . [3]

It recognized early bud bank, originated in the Italian Renaissance. Word "bank" in English called "Bank", by the Italian "Banca" evolved. [3]

commercial Bank

In the Italian text, Banca is a "bench" means. Initially bankers are ancestral home in northern Italy Lombardy Jews, they escape the war, he moved to the British Isles, in exchange, safekeeping valuables, as the exchange industry. Master each one stool in the market, according to operate currency exchange business. If anyone experiencing cash flow problems, when unable to pay the debt, it will lead to its creditors rallied broken benches, changers credit that is declared broken. English "bankruptcy" as "Bankruptcy", that comes from this. [3]

Development of international trade and generate early banking industry are closely linked. Medieval Europe, the Mediterranean countries, especially Italy, Venice, Genoa and other cities is famous for the International Trade Centre, merchants, market prosperity. But then society feudal separatism, chaotic monetary system, national businessmen carried coin shape, fineness, weight varies, in order to meet the needs of business development, the need for currency exchange. Thus, in the money exchange business and simply charge a fee from suppliers of professional money began to emerge and develop.

With the development of off-site transactions and international trade, the trouble and the risk of business people from around the world in order to avoid long-distance carry generated, he began his own money to pay the presence of a professional money provider for the execution of foreign exchange and payment. This time professional money providers already reflect the bank's initial budding functions: currency exchange and money allocated. [3]

With the acceptance of deposits increasing number of business people who are not at the same time it found that more than deposit withdrawal deposits, so they began to exchange business in temporarily idle funds loaned to the funding needs by the community. Initially, merchants loaned money is limited to its own funds, with the advent of the proxy payment system, that is, the borrower of the loan term deposit lenders place and notify the agent who grant loans to pay. [3]

Visible, in essence, the loans are not only limited to real money, but became part of the carrying amount of the credit, which marks the essential characteristics of modern banking has emerged. [3]

Original form of modern commercial banks are capitalist commercial banks, it is a product of the capitalist mode of production. With the development of productivity, production and technological progress, the expansion of social division of labor, the capitalist relations of production began to grow. Some farm owners manual with city businessman, banker together form a new class - the bourgeoisie. [3]

Since the feudal nature of bank lending usury, the average annual interest rate of 20% to 30%, a serious impediment to the social transformation of the industrial capital of idle capital. [3]

In addition, the bank's borrowers early mainly government and a number of the privileged class rather than business, the emerging bourgeoisie businesses can not get enough credit support, while the capitalist mode of production and development is an important prerequisite for the organization is to have a lot of necessary for the production of capitalist money-capital. Thus, the emerging bourgeoisie is an urgent need to establish and develop capitalism Bank. [3]

According to the "2013--2017 Urban Commercial Bank Market Outlook and development of strategic planning analysis report" analysis, capitalism produces commercial banks, basically in two ways:

First, the old usurious nature of the bank gradually adapt to the new economic conditions, the evolution of the capitalist banks. In Western Europe, by the goldsmith industry evolved from the old banks, mainly slowly transformed into capitalist banks through this pathway.

Chouzhou Commercial Bank

Another way is to joint-stock banks in accordance with the emerging bourgeois capitalist principles of organization, which is the main route. The establishment of the historical process of capitalist banks, at the earliest establishment of the capitalist system of the United Kingdom was particularly evident. In 1694, with the help of the government, the British established the first company in the history of capitalism joint-stock commercial banks - the Bank of England. [3]

It appears, he declared the end of the nature of usury banking monopoly in the field of social credit, marking the capitalist modern banking system began to form and produce commercial banks. In this sense, the Bank of England is the originator of modern commercial banks. [3]

Following the Bank of England, European capitalist countries have set up commercial banks. Since then, the modern commercial banking system in the world began to spread. [3]

Compared with the West Bank, the Bank of China is produced later. Chinese records on the banker, the earlier the temple pawnbroking Northern and Southern Dynasties. By the Tang Dynasty, there has been a similar bill "flying money", which is China's first exchange business. North Emperor Song, Jiaozi Sichuan wealthy issued an early Chinese banknotes. To the Ming and Qing dynasties, the pawnshop is China's major credit bureaus. [3]

Ming, some of the larger money management industry, money exchange shop developed into a silver village. Silver Zhuang produce early, in addition to the money changers, but also engaged in grant loans to the Qing Dynasty, gradually open deposit, exchange business, but ultimately under the Qing government restrictions and oppression of foreign banks, decline. China's modern banking in the 19th century invasion of foreign capitalism before the rise of the bank. [3]

The first foreign banks to China is the British East Bank, followed by the capitalist countries have come to China to set up the bank. Although foreign banks in China to the Chinese economy has brought tremendous damage, but the objective is also to the development of China's banking sector played a stimulating effect. [3]

To get rid of foreign banks dominate, the Qing government in 1897 set up in Shanghai Commercial Bank of China, marking the modern generation Chinese banks. Thereafter, Zhejiang Industrial Bank of Communications have been produced. [3]

Commercial banks to today, was due to its self-liquidating loans granted based on business conduct so as to obtain "commercial banks" in the title compared to far cry from. Today's commercial banks have been given a wider and more profound meaning. Especially since the Second World War, with the development of society and economy, increased competition in the banking sector, the business scope of commercial banks continued to expand, becoming multi-functional, comprehensive "financial department store." [3]

Bank Characteristicsedit

Overall, it is estimated in the second quarter industrial production is expected to grow 8.8 percent, an acceleration of 0.1 percentage points compared with the first quarter; the third quarter, industrial production growth will be further accelerated, it is estimated that the rate will not too much, is expected to grow by about 8.9%.

Specifically, there are three major industry concern. First, computer, communications and other electronic equipment manufacturing industry. May, computers, communications and other electronic equipment manufacturing sector grew by 9.9% ,. This shows that, in labor, land and capital costs rising background, years of leading the development of China's processing trade in the electronics industry seems to have retired. Second, manufactures chemicals and chemical manufacturing. May, chemical raw materials and chemical products manufacturing sector grew by 10.8%, the growth rate down 0.3 percentage points over the previous four months; 1--5 months, an increase of 11.0%, the growth rate down 0.9 percentage points over the same period last year . This shows that, in the context of increasing environmental requirements, "two high and one low," the industry development prospects will be more bleak. Third, cement and steel industries with excess capacity. In May, the average daily cement production increased by 3.2%, the growth rate down 0.9 percentage points over the previous four months; 1--5 Yuefen daily cement production increased by 4.1%, the growth rate down 1.8 percentage points from a year earlier. Although the average daily production of steel in May slightly faster than the growth rate, but a - a significant decline in May year on year growth rate 4.7 percentage points. This shows that, in the industrial structure adjustment and economic transformation and upgrading background, prospects for the development of industries with excess capacity still endless optimism. Therefore, commercial banks lending to these sectors to enhance risk awareness, strict examination and approval, adhere to the "Dos and Don'ts" to prevent the occurrence of a significant increase in new bad loans and poor rate.

Business modeledit

From the development of commercial banks, the commercial banks operating in two modes. One is the British model, commercial banks mainly short-term commercial financing facility, with short term lending, liquidity is high. [4] Such business model for banks relatively safe and reliable. The other is German, its business is a comprehensive formula. Commercial banks not only short-term commercial intermediation of funds, but also long-term fixed capital facility that engaged in investment banking business. [4]

China implemented a sub-sector business model.

In order to adapt to the current characteristics of China's separate operation and development trend of mixed operation, the sixth meeting of the Standing Committee of the Tenth National People's Congress adopted December 27, 2003 "About modification <People's Republic of China on Commercial Banks> of decision. " The new "Commercial Bank Law" the relevant provisions of the original can not be mixed on Commercial Banks were modified. August 29, 2015, the Sixteenth Meeting of the NPC Standing Committee passed the "People's Republic of China Commercial Bank Amendment (Draft) Law" became effective October 1, 2015. The amendment to the original "People's Republic of China Commercial Bank Law" made two changes: First, by deleting Article 39 first paragraph; the second is the deletion of Article 75 of the third item in the " deposits and loans. " Especially in the second place, remove the loans and deposits shall not exceed 75% of the provisions of the deposit-loan ratio by the statutory regulatory liquidity indicators into monitoring indicators.

Related Functionsedit

Functions of commercial banks is by its nature the decision, there are five basic functions:

Regulate the economy

Economic regulation refers to commercial banks through its credit intermediation, shortage of funds transfers all sectors of society, at the same time under the guidance of the central bank monetary policy and other national macro-policy, economic structure, the proportion of investment consumption, the adjustment of industrial structure and other aspects. In addition, commercial banks through its financing activities in the international market also can adjust the balance of payments of the country. [5]

Commercial banks because of its wide range of functions, so that its impact on the overall socio-economic activities is very significant, among the special and important role in the entire financial system and the national economy. With the integrated development of the market economy and the global economy in 2012 highlights the functions of commercial banks have diversified development trend. [5]

Credit creation

On the basis of commercial bank credit intermediation and payment functions on mediation, resulting in credit creation functions. Commercial banks are able to absorb all kinds of deposits bank deposits and various loans absorbed by it and, on the basis of checks on the circulation and transfer settlement, loans and deposits as derived, in which no cash deposit or withdraw cash incomplete It based on the increased funding of commercial banks, the last in the entire banking system, the formation of several times the original deposit derived deposits. [5]

Business a long time, various commercial banks are the only financial institutions can absorb demand deposits, checking account set up institutions, on the basis of the transfer and check the flow of produce. Commercial banks through their credit activities to create demand deposits and contraction, if there is not enough demand for loans, deposits to lend out, it would not create, because the loan was derived deposits; the contrary, if you repay the loan, it will shrink accordingly derivative deposit. [5]

And the degree of shrinkage derived consistent. Therefore, commercial banks, deposits occupies a very important position in their operations.

Credit intermediary

Commercial Banks Related Books

Credit intermediary commercial banks the most basic features to reflect their operations functions. The essence of the functions of the business of the bank through debt, on the various social idle money in the bank to focus, through asset business, put it toward sectors of the economy; commercial banks as lenders and money-capital borrowing by intermediaries or representatives, to achieve capital facility, and the absorption of funds from the cost of loans and interest income, investment income balance, get interest income, the formation of bank profits. Commercial Bank became the sale of "capital goods" and "big business." [5]

Commercial banks realize intermediation between surplus and shortage of capital through credit intermediary functions, does not change the ownership of the money capital, the only change in the right to use monetary capital.

Pay an intermediary

In addition to commercial banks as credit intermediaries to finance money-capital, also performs the function of money management industry. By deposit transfer on the account, the customer pays the agent, on the basis of deposits, cash and other payment for the customer to become businesses, groups and individuals who keep money, pay the cashier and agents. [5]

Commercial banks as the center, forming the economic process without beginning or end of the payment chain and debt payment.

Financial Services

With economic development, industrial and commercial enterprises increasingly complex business environment

Commercial bank credit intermediation

Of business competition among banks has become more violent of the bank due to the wide contact surface, relatively well-informed information, particularly computer widely used in the banking business, it has to provide customers with information on the conditions of service, consulting services, business "decision support" and other services came into being, the development of production and circulation of specialized businesses, and many of the original claim to belong to their own monetary operations transferred to the bank on his behalf, such as payroll, the agent to pay other expenses. [5]

Personal consumption also increased from mere money and transactions, transfer settlement development. Modern social life, in many ways set forth requirements to commercial banks financial services. [5]

Under intense business competition authority, commercial banks also continue to develop the service sector, through the development of financial services, to further promote the expansion of the business assets and liabilities, and the assets and liabilities of business and financial services combine to open up new business areas. In modern economic life, financial services has become an important function of commercial banks. [5]

Index dataedit

commercial Bank

Commercial banks major regulatory indicators. As of the end of December 2012, China's commercial banks non-performing loan balance of 492.9 billion yuan, an increase of 64.7 billion yuan, non-performing loan ratio was 0.95%, down 0.01 percentage points.

Liquidity ratio was 45.8%, up 2.7 percentage points; the deposit-loan ratio of 65.3%, up 0.5 percentage points; RMB excess reserve ratio of 3.5%, up 0.4 percentage points.

Commercial Bank annual total net profit of 1.24 trillion yuan, up 18.9%; the average return on assets was 1.3%, unchanged from the same period in 2012; the average capital profit margin of 19.8%, down 0.6 percentage points; the weighted average capital adequacy ratio 13.3%, up 0.5 percentage points; weighted average core capital adequacy ratio was 10.6%, up 0.4 percentage points.

Main Propertiesedit

Enterprise features

Such as: You must have the required equity capital business, and achieve management prescribed minimum capital requirements; must pay taxes; the implementation of autonomous, self-risk, self-financing, self-restraint; to obtain profits for business and development purposes power. [5]

Finance companies

Commercial banks operating object is not an ordinary commodity, but money, money, range of commercial banking activities are not production and circulation areas, but the field of monetary credit, commercial banks are not directly engaged in commodity production and circulation enterprises, but to engage in commodity production and circulation enterprises to provide financial services business. [5]

Special Bank

Commercial banks as a special bank, the first in the business nature and operational objectives, the central bank and commercial banks and financial institutions in different policy. Commercial banks for profit, emphasis on profit, the principle of safety and liquidity, without government intervention in the business process. [5]

Legal Nature

Franchise system

Commercial banks chartered by the state, the bank issuing the operating license sector is the banking regulatory agency of the State Council. Concession approval process mainly: first filed by the applicant, and then be reviewed by the China Banking Regulatory Commission. [5]

Formal examination to clarify the various application documents, whether the information is complete, comply with the law; substantive examination to ascertain whether the applicant meets the conditions of the operation of commercial banking. After being examined by the other documents required by law and the official application form will be filled out by the applicant, the information submitted to China Banking Regulatory Commission approved and issued concession license. It is worth mentioning that the power is completely owned by the state franchise approved, in line with the conditions established commercial banks does not mean that will be able to obtain operating licenses. [5]

Corporate

Commercial banks have a corporate nature, it has legal status. Enterprises are economic organizations, for-profit; the organization is a legal person, but its scope includes not only business but also non-corporate organizations and groups. Corporate treated as a compound word, which itself is a classification of legal persons. China 1986 "Civil Law" has classified corporate and non-corporate legal persons. [5]

Corporate is engaged in production and operations, in order to create social wealth, accumulated for the purpose of expanding the social, economic implementation of corporate accounting system. "People's Republic of China Company Law" December 29, 1993 by (the "Company Law") will be divided into two categories corporate three forms.

The first is the limited liability company, limited liability companies and two forms of state-owned limited liability company by a number of shareholders of joint investment;

The second type is Limited, the shares of such companies can be listed for public offering and in the form of shares in circulation. Organizational forms and institutions set up commercial banks should comply with "Company Law". [5]

Thus, the legal nature of Chinese commercial banks are chartered corporate.

Organizational formsedit

Affected by the international and domestic political, economic, legal and other factors, organizational forms countries in the world of commercial banks can be divided into single bank system, the bank branch system and the Group's banking system and banking system chain.

Unitary

Single banking system refers to a form of organization is not set up bank branches, all operations carried out solely by the relatively independent of commercial banks, this system is mainly concentrated in the United States.

advantage

First, you can restrict banking mergers and monopolies, in favor of free competition; secondly, help coordinate the relationship between banks and local governments, banks to better serve local economic development services; In addition, since a single banking system and full independence autonomy, less internal level, and thus greater flexibility in its business operations, it is also easier to manage.

Shortcoming

First, the unitary banks smaller, higher operating costs, is difficult to achieve economies of scale; secondly, there is a contradiction Social Development unitary banking system and economy, artificially created circuitous flow of capital, weakening the competitiveness of the banks; again, a single system banking business is relatively concentrated, higher risk. With the popularization of computer application, the unitary limit banking business development and financial innovation has become even more obvious drawbacks. [5]

Branch system

Branch banking system, also known as the total branch system. Implementation of this system of commercial banks outside the head office, the general set up branches, the business branch of the bank in accordance with the unified head office instructions apply. Branch system by way of management can be further divided into different headquarters system and total management system. Head office system that is the head office in addition to leadership and management of branch office outside itself open for business; and in the total management system, the head office is only responsible for the management and control branches except itself is not open for business at the head office location separate branches or business Ministry to conduct business activities. [5]

advantage

Implementation of this system of commercial banks is huge, many branches, to facilitate banks to expand their business scope, reduce operational risks; between the head office and branches, specialization can be implemented, greatly improve the efficiency of the bank, between the branches transfer of funds is also very convenient; easy-to-use advanced computer equipment, extensive financial services, achieve economies of scale. [5]

Shortcoming

Easy to accelerate the formation of a monopoly, the implementation of the system of bank size, the internal levels, and thereby increasing the difficulty of the bank management. But overall, the system branches to better meet the needs of modern economic development, which was widely recognized by all countries the banking sector, has become the main form of organization of contemporary commercial banks.

System Group

Group bank system, also known as bank holding company system, is defined by a few large companies or consortia to set up a holding company, and then to control or acquire a number of commercial banks by the holding company. Bank holding company is divided into two types:

1. Non-bank holding company, which is organized by business groups controlling stake in a major bank, the holding company of this type at the same time hold a bank stock, but also holds a number of non-bank shares in the company. [5]

2. Bank holding company, refers to the direct control of a large bank holding company, and holds shares in a number of small banks.

Chain system

Chains banking system, also known as Union Bank System. It refers to a group or a number of independent banks to purchase the majority shares of these banks to control the system. Under this system, each bank is an independent legal status, but in fact a group or a person is subject to control. [5]

Internal organization

Decision System

Commercial banks by the main decision-making system

Citibank is the banking system of a typical group

Shareholders and board composition. General meeting of shareholders is the highest authority of the joint-stock commercial banks. Equity recruitment buy bank-issued preferred stock investors become preferred shareholders of banks, investors to buy bank-issued ordinary shares become ordinary shareholders of the bank. The main content and permissions shareholders' meeting include: Election and replacement of directors, supervisors and decisions relating to remuneration; examine and approve the bank's management approach and a variety of major motion vote; amending the bylaws. Decision-making body is the Board of Directors elected by the general meeting of shareholders. [5]

Implementation of General Assembly resolution of the board represents the shareholders' general meeting of shareholders, is responsible for the general meeting of shareholders. Commercial Bank Board of Directors has the following important powers: to determine the bank's business decisions, the Board of Directors are generally not directly involved in the daily work of banks, but the banks of the major issues to discuss with the directors, decisions by the Board; the Board of Directors have the right to appoint and dismiss the bank managers, choose familiar with banking executives to manage specific banks; the establishment of various committees or subsidiary bodies, such as the executive committee, the credit committee, evaluation committee, with its management of the activities organized by the bank, command and supervision. [5]

Execution System

Execution system of commercial banks by the general manager (president) and deputy general manager (vice-president) and its various business units led components. General Manager (President) is the chief executive of commercial banks. General Manager (President) of the main terms of reference of the Executive Board resolution, the bank's business organization and leadership activities. General manager (president) of the leading commercial banks also set a number of business, departments and department managers.

Monitoring System

Supervision system of commercial banks by the supervisory board and audit departments. Produced by the general meeting of shareholders the board of supervisors elected representatives of the shareholders' meeting of business and internal management of commercial bank supervision. Commercial bank audit department is a department under the leadership of the board of directors or management, whose responsibility is to maintain the integrity and effective operation of the funds of bank assets, and the management and operation of the service quality of the bank's independent assessment.

Business Scopeedit

basic introduction

Under the "People's Republic of China Commercial Bank Law", Chinese commercial banks can operate the following businesses: public deposits, loans; handling domestic and international settlement, bills discounting, issuing financial bonds; issuing agent, payment, underwriting government bonds, the sale of government bonds; engaged in lending; trading, buying and selling foreign currency; providing letters of credit and guarantees; payment and collection agents and insurance agents and the like. According to regulations, commercial banks shall not engage in securities business and non-banking financial services other than government bonds. [5]

Although the form of organization of national commercial banks, name, business content and focus vary, but on the main business of its operations, it is generally divided into liability business, business assets and off-balance sheet business. With the development of international banking, these domestic services can also be extended to the international business. [5]

Liability business

Liability business is the formation of commercial bank sources of funds business, is the premise and condition of commercial bank assets business. To sum up, commercial bank debt business broadly includes equity capital and absorb foreign capital into two parts. [5]

Commercial banks' equity capital

Commercial banks own capital is the initial capital to carry out its operational activities, simply put, is the capital of its operational activities, the main part of the establishment have issued stock to raise the share capital, reserve and undistributed profits. Equity capital is generally only a small part of its total liabilities. The size of the banks' equity capital, reflecting the bank's strength and credibility, but also a bank and absorption of foreign capital, and therefore how much equity also reflected the bank's capital strength level of protection for creditors. Specifically, the bank's capital including equity, earnings, debt capital and other sources of funding. [5]

Types of deposits

According to the traditional division of deposit methods, there are three, namely, demand deposits, time deposits and savings deposits. [5]

1. Demand deposits

Mainly refers to the deposit account at any time by the access and transfer of deposits, it is no exact time limit, banks have no right to require customers to make withdrawals prior written notice. Holding checking account depositors can withdraw their deposits in various ways, such as a check, cashier's check, money order, phone transfer, use an ATM or a variety of other ways and other means. [5]

Due to a variety of economic transactions including credit card business and retail are carried out by checking account, so in demand deposits abroad again called trading account. Demand deposits of commercial banks as the main source of funding has the following characteristics: [5]

One has a strong ability to derive. In the case of non-cash settlement, the bank will absorb the excess of original deposits of gold for each quasi-loans, customers in obtaining loans, the absence of immediate withdrawal, but transferred to a checking account, on the one hand so that banks increased loans, while increasing the demand deposits, create derivative deposit. [5]

Second, mobility, access to frequent procedures are complex, higher risk. Since demand deposits frequent access, but also to provide a variety of services, higher demand deposits into death, and therefore less demand deposits or interest payments. Third, demand deposits relatively stable portion can be used for loans. Although demand deposits mobility, but many depositors in the bank, and there is always some can be used to balance the external lenders. Fourth, banks and demand deposits as a bridge close customer relationships. Comparison of commercial banks to establish close business contacts with customers through frequent access to business demand deposits, and thus attract more customers, expand their business scale. [5]

2. Deposits

It refers to a pre-agreed with the bank customer deposits deposit period. Term deposit is usually 3 months, 6 months and 1 year, ranging up to a maximum period of 5 years or 10 years. Interest rates differ depending on the length of different maturities, but are higher than demand deposits. Deposit certificates of deposit as collateral to obtain bank loans. [5]

Deposit has the following characteristics:

First time deposits with investment. Due to the high deposit rates, and the risk is small, so it is a minimal risk investment. For banks, due to the longer period, according to the provisions generally not paid in advance, which is a stable source of bank funding.

Second, the deposit reserve ratio is lower than demand deposits, time deposits required. Because deposits constrained period, a higher stability, so the deposit reserve ratio requirements can be lower. [5]

Third, the procedure is simple, low cost, small risk. Due to a one-time access to time deposits handled during the deposit does not have to have other services, in addition to other no interest charges, thus lower costs. At the same time, high stability make deposits less risk.

3. Savings deposit

Mainly refers to personal savings deposit money and get some interest and opened. Savings can be divided into demand and time deposits. Savings has two characteristics: First, the majority of personal savings deposits to savings and purchasing power conducted. Second, the financial regulatory authorities operate savings business of commercial banks have strict rules. [5]

Because most savings deposits belong to the individual, the community dispersed in each household, in order to protect the interests of depositors, so countries to operate savings deposits of commercial banks have strict regulations and requirements of the savings banks bear unlimited liability if . In addition to the above traditional deposit business, in order to attract more deposits, breaking the relevant laws and regulations restrict the West Bank in the deposit business tool has many innovations. As can transfer payment order accounts, automatic transfer accounts, money market deposit accounts, certificates of deposit, and so large. [5]

Long commercial banks, short-term borrowings

Commercial bank foreign borrowing depending on the time, can be divided into short-term borrowings and long-term borrowings. [5]

1. short-term loan

It refers to debt maturing within one year, including interbank loans, the central bank loans and other sources of short-term borrowings. Interbank borrowing short-term funds refers to the intermediation between financial institutions, primarily to support routine cash flow, which is an important channel for commercial banks to address short-term surplus and deficiency, adjust the statutory reserve positions and financial intermediation. Since the interbank deposit accounts is usually through the central bank was, in fact, excess reserves of the swap, so-called central bank funds in the United States is called the federal funds. [5]

Central Bank, the central bank credit to commercial banks, mainly in two forms: First, rediscount, the second is refinancing. The central bank rediscount commercial banks by buying commercial bills discounted but undue held to provide financial support to the behavior of commercial banks, also called indirect loans. Refinancing is Xinyongfangkuan central bank to commercial banks, also known as direct loans. [5]

Refinancing and rediscount of commercial banks to finance not only the short-term funding of an important channel, but also the importance of central bank monetary policy tools. Short-term borrowings from other sources have rediscount, repurchase agreements, certificates of deposit and the large European money market borrowings. [5]

Short-term loans of commercial banks mainly has the following characteristics: [5]

First, the liquidity needs of time and money on very clear. Short-term loans in the amount of time and have a clear contractual provisions of the loan agreement to repay clear, commercial banks for short-term loans of liquidity needs to grasp in advance the exact time and amount, but also plans to be controlled, as a liability management more convenient. [5]

Second is the need for liquidity is relatively concentrated. Unlike short-term borrowings as dispersion deposit objects, or whether it is relatively concentrated in time than the amount of the deposit. [5]

Third, there is a higher interest rate risk. Under normal circumstances, short-term borrowing rates are generally higher than the same period deposits, especially closely related to short-term borrowing of capital supply and demand situation and market interest rates, changes in interest rates led to a lot of factors that short-term borrowing, and thus a higher risk. Fourth, the main short-term loans for short-term positions shortage needs. [5]

2. Long term loan

It refers to the loan repayment period more than one year. business

Commercial banks' internal organization chart

Long-term bank borrowings mainly take the form of the issuance of financial bonds. Financial bonds can be divided into capital bonds, financial bonds and international financial bonds. [5]

Issuing financial bonds and deposits compared to the following characteristics:

Different purposes (1) financing

The total amount of deposits in order to expand the sources of funds the bank, while the issuance of financial bonds in order to increase long-term sources of funds to meet the financial needs and specific purposes. [5]

Different mechanisms (2) Financing

Deposits are frequent, unlimited, and the issuance of financial bonds is concentrated, there is a limit of deposits is passive debt, and the issuance of financial bonds is Bank of proactive debt. [5]

Different Efficiency (3) financing

Since the interest rate financial bonds interest rates are generally higher than the same period of the deposit, the customer has a strong appeal, and thus the efficiency of funding than deposits.

(4) Stability of different financial absorbed

Financial bonds have a specified repayment period, generally do not advance debt service, high stability, and the term deposits have

A certain flexibility, stability is worse. [5]

(5) different liquidity

Under normal circumstances, the basic fixed deposit relationships between banks and depositors, not transferable; and financial bonds are generally anonymous and there is a good flow of the market, has a higher resistance than the transfer of deposits. [5]

Business assets

Business assets of commercial banks is its use of funds business, lending business is divided into two major categories of business and investment. Business assets of commercial banks is also a major source of income. In addition to deposits in commercial banks retain a portion of the absorption of the reserve outside, all can be used to loans and investments. [5]

1. commercial bank lending operations

Commercial bank loans as the lender, according to certain principles and policy loans to debt service as a condition, a certain amount of money to provide funds to the proposition lending practices used by the borrower. Commercial bank loans are the biggest assets of the business, accounting for about 60% to substantially all of the assets of the business. Lending operations according to different classification criteria, there are several classification methods:

First, the loan period can be divided into current loans, term loans and overdraft loans categories;

Second, according to guarantee conditions of the loan classification, it can be divided into Xinyongfangkuan, secured loans and bills discounted;

Third, divided by loan purpose, very complex, if by industry industrial loans, commercial loans, agricultural loans, consumer loans and loans to science and technology; there are divided by the specific purpose of working capital loans and fixed-capital loans. Fourth, by way of repayment of the loan can be divided into one-time repayment and amortization. Fifth, the quality of loans divided by normal loans, special mention loans, subprime loans, doubtful loans and loss loans.

For any loan, you must follow the following basic procedures, namely the loan application, loan investigation, the borrower's credit evaluation, approval, and signed loan contracts secured loans, loans, credit checks, loans recovered. [5]

2. The commercial bank securities investment business

Securities investment business of commercial banks, commercial banks will be funds for the purchase of securities activities. The main investment is a way of buying and selling stocks, bonds through the securities market. Securities investment business of commercial banks have to spread the risk, maintain liquidity, reasonable tax revenue and increasing significance and so on. The main target of investment banking business is all kinds of securities, including treasury bills, long-term government bonds, government agency bonds, municipal bonds or local government bonds and corporate bonds. [5]

Intermediate Business

Intermediate business refers to commercial banks engaged by the Accounting Standards are not included in the balance sheet, without affecting its total assets and liabilities, but the bank can affect the profit or loss, change management activities of bank assets rate of return.

Meaning 1. Intermediate Business

Intermediate business has narrow and broad points. Intermediate Business narrowly refers to those not included in the balance sheet, but is closely related with the business assets and liabilities of the business, and under certain conditions, it will be converted into business assets and liabilities of the business operations. In addition to the broad intermediate business intermediate business narrow sense, but also includes the settlement, agency, consulting and other risk-free business activities, so generalized intermediary business means not all commercial banks in the balance sheet reflects the business. [5]

According to the "Basel II" proposed intermediate business can be broadly divided into two categories:

One or claims withered Service, namely narrow intermediate business, including loan commitments, guarantees, financial derivatives and investment banking.

Second, the financial services business, including trust and consulting services, payment and settlement, nominee services, loan-related services as well as import and export services. Since the 20th century's ribs, under the impetus of financial liberalization, international commercial banks under pressure to promote survival and development needs, have the advantage of a large number of operators to use their intermediary business to get more non-interest income. With the large increase in the middle of the business, non-interest income of commercial banks increased rapidly. [5]

2. Intermediary Business of the main categories:

According to (Basel) the relevant provisions of the commercial banks operated by the middle of the main business, there are three types, namely, guarantees and similar contingent liabilities, commitments, as well as interest rates or exchange rates or related items. [5]

Guarantees and similar contingent liabilities include guarantees, standby letters of credit, documentary letters of credit, promissory notes and the like. Such sheet business have a common feature, that is to provide security to the trading activities of the existing debt by a third party, a bank, and you assume the current risk. [5]

Commitment can be divided into two categories:

First, irrevocable commitment, in any case, even if a potential borrower's credit quality or decreased worsening conditions, the banks must fulfill the obligations previously promised;

Second, revocable commitment that, under certain circumstances, especially in the bath in the credit quality of the borrower or decreased worsening conditions, the bank can recover the original promise of obligations without suffering any financial sanction or punishment . With interest rates or exchange rates or related projects since the 1980s and refers to the interest rate or exchange rate-related innovative financial instruments, mainly in financial futures, options, swaps and forward rate agreements and other tools. [5]

Risk Principlesedit

risk

Commercial banks have the following main risks:

Credit risk;

Operating profit is the goal of commercial banks

2. Country risk and transfer risk;

3. Market risk;

4. Interest rate risk;

5. Liquidity risk;

6. Operational risk;

7. Legal risk;

8. Reputational risk.

Since commercial banks have the characteristics and risks of the CPA should maintain due professional care to the audit risk to an acceptably low level.

Operating principle

The operating principle of commercial banks

Commercial banks are the biggest influence on the financial market, the largest number, the most widely involved financial institutions. Operation of commercial banks in general should at least adhere to the following principles:

1. efficiency, safety, mobility principle

Commercial banks, as corporate profitability is its primary purpose. However, the benefits of a safe and liquid assets as a precondition. Security and embodied in terms of liquidity, liquidity and efficiency of the places for the material basis. Commercial banks operating in the process, must effectively seek effective balance in all three of the question.

2. The principle of independent business law

This is a commercial bank as a corporate concrete manifestation, but also an inevitable requirement of market economy mechanism operation. Commercial banks do business according to law, without any units and individuals. As an independent market players, according to the law of their competence to deal with all matters of management, independent participation in civil activities, and with all its legal property independently bear civil liability.

3. The principle of the protection of the interests of depositors

The deposit is the main source of funds for commercial banks, depositors are the basic clients of commercial banks. Commercial banks, as the debtor, whether fully respect the interests of depositors, strictly fulfill their obligations, and effectively protect the interests of depositors bear responsibility, directly related to the bank's own operations.

4. voluntariness, equality and good faith

Civil legal relationship between equal entities between commercial banks and customers. Therefore, commercial banks and business customers should be based on the basis of equality, voluntariness, fair trade, can not be forced, without imposing unreasonable conditions, the parties shall in good faith, fully fulfill their obligations.

Termination of takeoveredit

Bank takeover

Commercial banks have or may have a credit crisis, seriously affecting the interests of the depositors, the People's Bank of China may take over the bank. Purpose of the Central Bank taking over commercial banks credit crisis is to protect the interests of depositors, financial market order and stability, maintain social stability. Over decision by the People's Bank of China, and their implementation. The People's Bank of China took the decision shall specify the following contents: [6]

1. Commercial bank name to be taken over;

2. Take over the grounds;

3. Take over the organization;

4. - Over period.

Over decision will be announced by the People's Bank of China. It can be taken over by the China Banking Regulatory Commission itself to be entrusted to other bodies to implement. It took over a maximum period of 2 years. Termination due to take over for the following reasons: First, the decision to take over the time limit has expired, or take over the delay time China Banking Regulatory Commission's decision expired; second, to take over before the expiry of the period, the bank has the ability to recover operating policies; third, before the expiry of the term of takeover, the bank has been merged or declared bankrupt according to law. [6]

termination

1. Bank terminated due to dissolution. Bank dissolution procedures include: filing for dissolution; People's Bank of China approved the dissolution.

2. Bank terminated due to cancellation;

3. Bank due to bankruptcy and dissolution;

4. Bank liquidation. [6]

Its procedures:

A, payment and settlement costs;

B, repayment owed wages of workers;

C, pay personal savings deposits of principal and interest;

D, repayment of interest-bearing creditors priority;

E, other general creditors of the debt;

Distribution of surplus property F, shareholders. [6]

accounting systemedit

definition

Commercial banks should follow the law and the uniform accounting system as well as the relevant provisions of the People's Bank of China, establish and improve their own financial accounting system. Bank financial accounting system, based on specific regulations Countries, specifically set up to raise funds, the use of funds, increase revenue, improve management, improve economic efficiency, tax law, and accept a variety of financial accounting system audit institutions of oversight general. [7]

Accounting Principles

The bank's internal financial and accounting work of the following principles:

(1) accrual basis;

(2) the true record and fully reflect the principles of financial activities;

(3) Banks should regularly report on the financial situation, the principle of audit reports published. [7]

Accounting provisions

Bank Accounting Accounting provisions include:

(1) provision of bank deposits;

(2) investment banking bank accounting regulations;

(3) trust business accounting ;

(4) securities business accounting;

(5) Other business accounting. [7]

Reserve

It means in accordance with national regulations, by the lender in accordance with a certain percentage of the loan balance extraction, specifically to write off bad debt reserve. Full of bad debt reserve extraction, increased bad loan reserve balance; extraction of bad debt reserve fund balance, beginning of bad debt reserve Book balance should be higher or lower than the loan balance and the calculation of bad debt reserve extraction, It should be adjusted, and then rushed back to the difference any more or less make up part mentioning. [7]

Loan capitalists should be accounted for separately and individually reflected on the balance sheet as a deduction from loans. Mortgage loans, entrusted loans and placements of funds should not draw bad debt reserve. Full extract bad loan reserves, debit, "operating expenses" and credited to this account. Difference extraction loan capital, debit, "operating expenses" subjects, credited to this account. [7]

Fiscal Year

Fiscal year of a commercial bank Gregorian calendar January 1 until December 31. In case of December 31 for the holidays, the date of the balance sheet date still can not be postponed. Commercial banks accounting and property management in accordance with statutory accounting years, the Chinese People's Bank of commercial banks can serve as audit the accounts of the period and turned over to the financial statements of the period to calculate the overdue loans or bad debt situation, and as a bank evaluation operating hours foundation. [7]

Supervise

(1) examine and approve the establishment of commercial banks, change, termination and business scope.

(2) the situation of deposits, loans, settlements, bad debts of commercial banks at any time to audit inspection and supervision, in violation of regulations on banks arbitrarily raise or lower deposit rates or lending rates investigating acts.

(3) requires commercial banks to submit their balance sheets, income statements and other financial reports and annual reports.

(4) Check the Commercial Bank of the implementation of the laws, regulations and national industrial policy.

(5) Check the Commercial Bank plans to implement the central bank credit, foreign exchange and the cash plan programs and financial planning.

Liability management (6) Check the commercial banks, the level of quality of credit assets, financial flows and banks-effectiveness;

(7) Check the Commercial Bank of the annual financial statements. [7]

Category Descriptionedit

China's commercial banks include:

Five large state-owned commercial banks ( Commercial Bank of China , Agricultural Bank of China , Bank of China , China Construction Bank , Bank of Communications ).

12 small and medium sized national joint-stock commercial banks ( China Merchants Bank , Shanghai Pudong Development Bank , CITIC Bank , China Everbright Bank , Huaxia Bank , China Minsheng Bank , Guangdong Development Bank , Industrial Bank , Ping An Bank , Prudential Bank , China Zheshang Bank , Bohai Bank ) .

There are remaining 133 city commercial banks and about 302 rural commercial banks (otherwise than under preparation , all rural cooperative banks are to the restructuring of rural commercial banks), plus a postal savings bank .

As of late October 2013, the country set up village banks over 1000, 31 provinces in the country has achieved full coverage of village banks, nationwide coverage 1880 counties more than 50%, the Midwest formation 620, accounting for 62%.