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Keywords

urban commercial bank, corporate governance, local government, non-systemic financial risks

Abstract

With the increasing downward pressure on China's economy,the financial risks of domestic financial institutions continue to accumulate.As a part of China's commercial Banks,urban commercial Banks (hereinafter referred to as "urban commercial Banks")also face increasing financial risks.Based on the data of 103 urban commercial Banks from 2015 to 2017 and through the fixed effect model,this paper finds that the checks and balances on local government ownership cannot reduce the non-systematic risk of urban commercial Banks.The increase of executive compensation can help to reduce the non-systematic financial risk of city firms.The expansion of the number of directors is helpful to reduce the non-systematic financial risk,but merely increasing the number of independent directors cannot help to reduce the non-systematic financial risk.According to the empirical results,it is necessary for city commercial Banks to motivate senior executives and appropriately expand the size of the board of directors,but not deliberately increase the number of independent directors.The state should further guide the private capital into the city commercial Banks,so that the equity distribution of the city commercial Banks is more reasonable,and at the same time,it should reasonably arrange the property right,so that the governance structure can be improved only after the property right structure is improved.

DOI

10.16315/j.stm.2020.01.013

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