Abstract: From the perspective of the relationship between government, banks and state-owned enterprises, this paper systematically studies the endogenous mechanism and periodic law of commercial bank NPLs. The results show that the government control on state-owned enterprises and commercial banks is the root cause of endogenous NPLs. Combined with the orientation of the central and local government performance evaluation under the fiscal decentralization system, this paper further reveals the circulation track of periodic outbreaks of NPLs. Based on that, it points out that the fundamental solution to solving the endogenousness and periodicity of NPLs should be pushing forward the process of reform of state-owned enterprises and banks, especially strengthening the market-oriented reform of state-owned enterprises, and gradually exploring and improving the performance appraisal and assessment methods for the local governments.

Key words: non-performing loans, endogenousnsess, periodicity, government intervention, marketization