Theory Of Modern Commercial Banks' Financial System Innovation And System Innovation Of China's Commercial Banks

The rise and rapid development of financial innovation has brought about profound impact on the whole financial sector and the world economy. Although in different historical periods and from different perspectives to observe and study the financial innovation with different understandings, the western scholars have put forward various theories to explain the phenomenon, and therefore have offered us theoretical guide to study and analyze the financial innovation of our commercial banks. The biggest shock that the state-owned commercial banks currently face is from its system. To face the prospective international competition in the bank industry, it is not enough to rely simply on what has already achieved, it is also necessary to step up the reform of the state-owned commercial banks' system of property right and the corporate governance system, organizational structure, operation and management system, and internal control system. This paper suggest that an important concern at present should be deepening the reform of commercial banks' property right in order to gradually achieve the mixed operation system and to improve the supervision system of commercial banks according to the law of market economy.As the center of modern economy, finance is fundamentally the transactions of property right crossing time and dimensions. Without a clear defining of property right, there will appear not only serious problems of agents, but also the separation of the right of controlling from the surplus demanding right, with a consequence that no real effective corporate governance structure can be set up. Therefore, it is crucial to clearly define the property right for the development of finance. However, although our state-holding banks have set up their modern corporate governance framework, and the reform of their property right system has gained initial effect, there are still a lot of problems to be cleared and solved, for example: the share structure is not scientific or perfect yet; the board of directors does not yet function sufficiently; the incentives are still monotonous, etc..For the state-owned commercial banks to respond to the squeeze of the gradual "disintermediation" of finance and the challenges facing the transnational banks, the core policy is to speed up financial innovation, expand business scopes and improve competition power. However, the current "divided operation" system blocks up the space for financial innovation. With the comparatively mature development of the traditional assets and liabilities business and certain difficulties for further development, and facing the "disintermediation" trend of finance, it is an innovation for commercial banks to gradually penetrate into the sector of investment banks, making it a new business growth point. In consideration of China's current status of finance sector and the risks and supervision problems brought about by mixed operation, the mixed operation should be extended based on trying it out in selected banks, and financial holding corporations can be selected as a stage strategy for the state-owned commercial banks to achieve mixed operation.Financial supervision innovation is an important part of financial innovation. Meanwhile supervision innovation and financial innovation are a unity in a mutual game. As a result of supervision evasion itself, financial innovation objectively requires a break of some current rules and regulations. Even though supervising institutions recognize, encourage and support the innovations carried out by commercial banks, with the increased complication of supervising job, the increased workload and the broadening of supervision scope caused by the financial innovation, more is required of the supervision power of the supervision institutions. In modern market economy, the secure and healthy running of bank industry is a fundamental guarantee for the secure development of the whole economy. Therefore, it is crucial for the good implementation of bank industry supervision policy. China's banking supervision starts late, so the supervision policy and standard have both to be improved and enhanced.