Research On The Supervision System Of China's Foreign-funded Banks

On Dec. 11^th, 2006, China's financial industry was totally opened to the outside world, which signified the foreign-funded banks should enjoy the national treatments and domestic and foreign banking should compete with each other under more open & complex international environment. The entry of foreign-funded banks should benefit the building & sophistication of China's competitive financial market and the level of operation & management of domestic banks, which should undoubtedly speed up China's economic reform and bring dynamic financial risk that foreign-funded banks self-operational risk and transition of international financial risks, furthermore, specific risk accompanying developing countries should confront China's banking industry, that is to say, foreign-funded banks should squeeze the survival horizon and lead to the loss in business and bankruptcy of domestic banks and the monopolization & control of foreign-funded banks in financial sector and national economy, which should eventually force China's national financial industry to survive and loss its financial safety in competitive crack. So it's paramount to intensify the supervision of foreign-funded banks, in the theoretical sense, dedicated theoretical system on the supervision of foreign-funded banks hasn't been constructed, in the practical sense, due to the diversified supervision aims, institutions, contents and criteria, there are great differences between the supervision of China's banking industry and foreign banks. Therefore, overall understanding of opportunities and challenges brought by the opening-up of China's banking industry, we should use advanced international supervision exercises for references and optimize the supervision of foreign-funded banks under more open economic environment, which should promote the healthy competition of domestic and foreign banks and maintain the safety of national financial industry.Guided by general supervision theory, this paper relies on general supervision methods, combines the development and supervision of China's foreign-funded banks, and uses the practice of intemational supervision on foreign-funded banks, then systematically and wholly studies the supervision on foreign-funded banks. This paper not only includes fundamental theory on banking supervision, but also discuses the practical probe of foreign-funded banks supervision; not only historically inspects China's supervision on foreign-funded banks, but also introduces the realities of supervision on foreign-funded banks; not only demonstrates the existing problems of China's supervision on foreign-funded banks, but also puts forward relevant counter-measures sophisticating the system of China's supervision on foreign-funded banks.This paper is consisted of three parts, the first one mainly introduces the general theory on the supervision of foreign-funded banks and the basic status of foreign-funded banks, including birth, development and institutional framework, then expands on the theoretical base of supervision and introduces the contents and requirements of foreign-funded banks supervision, which provides theoretical support for the continuation analysis on the system of China's supervision on foreign-funded banks. The second part, this essay compares the international supervision on foreign-funded banks, which mainly includes the contents of 3^rd chapter and respectively comparatively analyzes the supervision of foreign-funded banks from three prospects: institutional framework, adjustment and risk management, in which some typical countries practices are included. The third part, how to establish the system of China's supervision on foreign-funded banks, which mainly includes the contents of fourth and fifth chapter. In this part, this essay analyzes the developing status of China's foreign-funded banks and puts forward the existing problems of the supervision of China's foreign-funded banks. Finally according to the supervising practices of China's foreign-funded banks and guided under the theory on the supervision of foreign-funded banks, this paper uses the advanced practices of international supervision on foreign-funded banks for reference and submits some specific counter-measures on constructing sound supervising system of foreign-funded banks and further decreases financial risks brought by foreign-funded banks, based on which cultivates perfect financial ecologic environment, fortifies the healthy competition between domestic and foreign banks and provides perfect financial support for well and rapid development of China's national economy.