4 - Risk management and performance in the Chinese banking sector

Abstract

As an important component of the financial system, the performance of the Chinese banking sector gets a lot of attention from the government, the banking regulatory authority, and bank managers. Empirical research in the banking sector uses different indicators to measure bank performance such as bank efficiency, bank productivity and bank profitability. Not only is the performance of Chinese commercial banks being paid a lot of attention, the Chinese government and the banking regulatory authorities are also concerned about the risk-taking behaviour of commercial banks. This chapter discusses the performance and risk condition of Chinese commercial banks, and the relationship between bank performance and bank risk is examined.