Enforcing the Monitoring on the Borrowers to Safeguard Bank’s Credit AssetsReport as inadecuate




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China banks did have strong monitoring effects on the borrowers before they become commercial banks. But as market economy’s developing,China’s bank indirstry structure, corporation operating mechanism and bank itself all changed greatly. These changes result in that the banks inChinacan no longer monitor the borrowers effectively anymore. The weakening of banks monitoring is harmful to safety of loan assets. To mitigate the information asymmetry between bank and borrower, enhance bank’s ability of controlling risk and safeguard the safety of loan assets, measures must be taken such as regulating competition of banking, detail content and procedure of monitoring, building friendship relation between bank and borrower, constructing harmonious financial entironment and enhance bank internal reforms.

KEYWORDS

Bank monitoring; safety of loan assets; relationship between bank and borrower

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Author: Hui Wang, Jianling Pan, Jianguo Pan

Source: http://www.scirp.org/



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