China Financial Business Segregation System And Universal Banking System

At the end of the 20th century, the financial universal banking system sprang up in the international finance. But China began to execute the segregation system in 1993, and this financial arrangement is still our practical and effective selection for a period of the time. On the one hand, we should realize the rationality of this adverse current selection against world backgrounds, on the other hand, we must recognize the "inefficacy"of the segregation system. In the long-term, the universal banking system is our financial direction.The thesis uses the following methodologies: the theoretical study & reality analysis, historical analysis methodology& horizontal analysis methodology, qualitative analysis& quantities analysis, etc. The thesis emphasizes on analyzing the problem of our financial management system. For the commercial bank plays important role in the finance, especially in our finance, the thesis discusses a side of segregation and universal banking system in the view of the commercial bank. I only hope that the thesis can bring you some new recognition and enlightenment to our financial system.The thesis consists three parts.Part One: It comprises the content from Chapter 1 to 2. The focus is introducing and researching two kinds of financial management system: business segregation and universal banking system. At beginning, it defines the term business segregation and universal banking. Secondly, It analyzes the causes that led to the business segregation at the first half of the 20l century, probes the pushing forces behind the global trend of universal banking, summarizes the regularity and developing current. Thirdly, the Chapter 2 compares the business segregation and universal banking system from different angles. Thorough the comparison I hope to give a comprehensive and objective awareness with two systems.Part Two: This is the central part of the thesis, ranging from Chapter 3 and 4. Thepart analyzes Chinese financial management system concretely. Chapter 3 narrates the evolution of Chinese financial system since the end of 1970s, analyzes the historic backgrounds, main causes and the effects of the financial business segregation.Chapter 4 includes three contents. (1) Financial business segregation is our effective and rational system. The causes are following: ?There are main system risks and in our financial market, besides common financial risks. The system risks brought by property right of our state business bank is more important. Because the state property right is confused, it makes investment earnings internalization & risks externalization. The investment of banks must put money into invented market to seek more investment return. But this disadvantages stock market and industrial departments that urgently need money. Furthermore, it will make the problem of state bank undesirable capitals more serious. So business segregation is necessary in order to insure finance safe. But we must know that this system can't overcome system risks. ï¿¢arious financial industries gets behind comparatively, so there have developing spaces in their own fields. Business segregation is fit in our situations; on the contrary early executing universal banking is unfit in developing finances. (3)From the environment, our financial law and supervisor system are still weak to universal banking. (2) Universal banking is our direction. At first, this is determined by the nature of commercial bank, a special enterprise, and the advantages of universal banking. Second the competition between financial institutes will be more intensive following the development of finance. The commercial banks need wider space that can be given by universal banking; Third China have entered WTO, our finance want to take part in global economy, our institutes compete with global financial enterprise. All of these require our development in accord with international current: deregulation segregation. (3) At last, the chapter points out the universal banking in the bud in China.Part Three: Policy suggestion.