Before 1997, that is, before the issue, merger and trusteeship of credit cooperatives in Shanghai, Hainan Province was established as a special economic zone, the economy began to develop rapidly, and the real estate industry also expanded on a large scale, accompanied by many financial institutions.
There are many banking financial institutions in Hainan Province. In this fierce market competition, all credit cooperatives have adopted high interest rates to attract deposits. Later, with the bursting of the real estate bubble, many credit cooperatives appeared a large number of non-performing assets, and the high interest promised to depositors also aggravated the operational difficulties of these credit cooperatives.
1997 12 16. Five credit cooperatives in Hainan Province were closed, and their creditor-debtor relationship was managed by Shanghai Development Bank. Of the remaining 29 credit cooperatives in Hainan Province, 28 were merged and issued to the sea. These 28 credit cooperatives and five closed credit cooperatives eventually led to the end of Shanghai Development Bank.
Extended data experience and lessons learned
1. It is worth reviewing the original issue in Shanghai.
In the early 1990s, after the "Hainan bubble" burst, its economy lost its true colors. Judging from the actual needs of economic development at that time and the competitive situation of local banks, it was not necessary to set up a Shanghai issue. Otherwise, we can only buy foreshadowing for future illegal operations (high-interest and high-risk lending).
2. Related party transactions should be strictly supervised.
The main reason is that there is no good control over the issuance of relationship loans to shareholders, making Shanghai Pudong Development Bank an ATM for shareholders. If shareholders spend time investing in disguise, it will make the moral hazard of high-risk operation of banks inevitable (taking other people's money for their own interests).
Shareholders should regard it as an industry, not to facilitate their own financing. Otherwise, banks can easily become cash machines for shareholders, so there should be strict restrictions on shareholder loans.
3. Administrative merger should be stopped.
The administrative merger of more than 30 urban credit cooperatives, which is unsustainable because of high risks, has become the direct cause of the final loss of confidence and run.
Baidu Encyclopedia-Hainan Development Bank