Abstract:

Based on data from 2004 to 2013，This paper used dynamic GMM regression method to discuss the relationship between corruption and non-performing loans of banks in China, the results show: the higher the level of corruption, the bank non-performing loans is also higher. Besides, high level of economic development and the degree of denationalization, asset-liability ratio of enterprise and government intervention can suppress an increase in non-performing loans of the banking sector, while increasing the size of bank credit will result in increased non-performing loans. Given China's current economy is in a transition period, to effectively prevent risks of corruption brought against the bank, we need to start from multiple, comprehensive management. It is necessary to pay attention to the control of corruption fundamentally, but also strengthen the ability of banks to prevent risks. This paper proposes the following policy recommendations: The government should continue to intensify anti-corruption efforts, strengthen integrity education and improve relevant laws and regulations and to continue to increase efforts to deal with corruption cases. Secondly, commercial banks should establish a scientific and effective internal control and risk prevention mechanisms, and strictly control the scale of credit. Third, Companies should be more rational and efficient use of bank loans. Finally, it should continue to improve the market mechanism, improve economic denationalization extent, promote economic development, the transformation of government function.