A Study on Management of Supervisory Capital Adequacy and Ratio of Economic Capital Return of Commercial Bank

Capital allocation means to link capital requirement with risk measurement to insure capital to be allocated to the most suitable area. Effective capital allocation procedure and optimized capital allocation performence is basic and necessary condition to bank share value maximization. Under framework of the Basel Accord, the paper discusses the optimization management of capital allocation according to some basic principles. It points out that capital adequecy of China's commercial banks has improved and contends that China's commercial banks should improve the economic capital return while raising capital adequency and shareholder value added.