Study On Supervision On Chinese Foreign Banks' Entry

With the banking industry opening to the outside world, a lot of foreign banks enter the Chinese marketplace, which directly challenge Chinese supervision of foreign banksThis paper starts from the risk characteristics of foreign banks, and then it analyzes supervision situation about foreign banks'access, and come to a conclusion that there is short of legal basis on how to enter China for foreign capital banks. In this paper, the author combines information economics and classic cost-benefit economics theory, and then establishes foreign banks' cost-benefit framework about supervision on foreign banks'access, and then analyzes three theory model about market entrance and activity entry:static game of perfect information during foreign banks'entry, dynamic game of imperfect information during foreign banks'entry and activity entry, and conclude that on different stages foreign banks have different strategic positions from the government and they are confronted with different policies during market entrance and activity entry. The government can lead foreign banks how to enter Chinese market and how to carry out new business. Empirical study demonstrates that regulatory policy is one of the most important factors that influence foreign banks' entry besides trade and investment. Regulatory policy affects not only the entry scale but also the entry style.In order to supply a legal basis on how to enter China for foreign banks, we can try adopting classification-entry system, location-leading policy, and can build a perfect lawful system.