Incentive Constraint Mechanism for Senior Executives of Village Bank

In order to support the new rural construction and solve the problems of China´s rural financial market, China Banking Regulatory Commission lowered the rural financial institutions admittance threshold in 2006 and set up many new-type rural financial institutions, so village banks come into being. However, the village banks didn´t operate as well as expected in practice. Starting from the incentive constraint mechanism along with introducing reputation mechanism, this paper studied Incentive restraint mechanism for senior executives of village banks and analyzed the operation effect arising thereof. At last, this paper provides the corresponding policy suggestions.