The Taiwan banking industry is over banking. Therefore, it needs to expand overseas market to solve the dilemma. Taiwan government signed MOU and ECFA in 2009. Taiwan banks increase advantages to enter China banking industry. Recently, China banking industry is actively establishment of Country Bank. The purpose of thesis is whether Taiwan banks into Country Bank have any changes or niche. Therefore, this study is to investigate why and how foreign banks want to invest Country Bank. This paper selects good performance in the Chinese market as benchmark bank. HSBC is the benchmark bank. I study Country Bank of HSBC to find it how to strategy and management. Finally, I use Case Study to find some ways to inspire Taiwan banks. One Country Bank invested about 40 million RMB. If establishes more than ten Country Banks can use The Banks Management System. The Position is service rural areas. And the products need to innovate and satisfy rural demand.

This paper emphasis on the importance of default correlation, and also illustrate how the concept is connected with the Basel Ⅱ framework’s intention. Moreover, the paper brought out the different methodologies used by practitioners to arrive at the default correlation calculation, namely, the dispute between asset correlation and equity correlation. Furthermore, based on the model proposed by Hamerle, Liebig, and Scheule (2004), a panel logit model is set up to capture the relationship between the default events and the risk components endured by the specific industry. The model is therefore used to test the applicability of such model using Taiwan’s banking industry data. The result is consistent with our expectation about including the macroeconomic variables which will help to explain the default events happened within the banking industry. But, to my surprise, the proposition about the contemporary systematic random risk effect seems to be insignificant and a fixed effect is suggested to be assumed instead.