| The so-called "foreign bank", there are two kinds of broad and narrow interpretation. In the "Foreign Financial Institutions Management Regulations" which states:"the head office is located in China's foreign capital banks", referred to as "foreign banks", which also refers to the narrow sense of the "foreign banks", simple terms, refers to the invest in foreign financial institutions in China set up sub-banks (or sub-line), should actually be called the foreign sub-banks. The article focuses on foreign banks, primarily in a broad sense, commonly known as foreign banks, foreign banks in China are mainly four kinds of organizational forms:First, foreign bank branches that foreign banks set up branches in China, but also of foreign banks in China to introduce the main manifestations. Second, foreign bank representative offices, refer to the territory of a foreign bank in China permitted to establish and undertake the appropriate consultation, liaison, market research and other non-operating agency of focusing on the activities. Its mainly engaged in non-operational activities, is located in the supervision of its relatively simple, this is not discussed. Third, foreign joint venture banks, foreign financial institution means the financial institutions in China with China in a joint venture construction and operation of banks. Fourth, foreign banks, namely, foreign subsidiary banks referred to above.Foreign banks in China have been 100 years of history. After the founding of New China, retained HSBC, Bank of East Asia, OCBC Bank and Standard Chartered Bank to continue to four foreign banks operating in Shanghai. In 1978, China's economic and social reform and opening up into the period.1979 Japan Export-Import Bank approved the establishment of representative offices in Beijing, became the first multinational to enter the Chinese mainland financial institutions, and marks the beginning of foreign banks into China. China has gradually relaxed after the foreign bank to enter China's geographical restrictions, until July 1998, China was finally announced the cancellation of the geographical restrictions on foreign banks, allowing it to set up branches in any region. In December 1996, China allowed foreign banks to conduct RMB business in Shanghai and the pilot, later to conduct RMB business gradually relax its restrictions. With China's accession to WTO, China's opening up of the banking industry five years after joining the WTO's commitment to abolition of geographical constraints, meant that foreign banks with full market access, as well as the right to offer renminbi retail business.Foreign banks in China has become an economic power can not be ignored. The entry of foreign banks to China's banking sector have a profound impact. On the one hand, a positive role is clear:as a new source of competitive forces, and its access to China's competitive financial market development and improve the management of domestic banks, as well as raising the level will play an important role. On the other hand, we should also clear to see that foreign banks to China's banking sector, some of the negative effects:First, foreign banks from the hands of domestic banks seize a large number of business and markets; Second, the entry of foreign banks to a certain extent, increase the instability of China's financial markets to China's financial regulators propose new challenges. If the policy inappropriate or inadequate monitoring, the introduction of foreign banks would have on domestic economic and financial impact of causing unnecessary. Therefore, adopting appropriate policies and regulatory measures to minimize the adverse effects of foreign banks is an urgent task in China. According to China's accession to the World Trade Organization (WTO) commitments, China will fully liberalize the end of 2006 the domestic financial market to foreign banks when the new ideas into our financial markets. Thus, in the current transitional period, studying how China can carry out effective supervision of foreign banks has important practical significance.In the last decade of the 20th century, the financial liberalization, globalization is developing rapidly. Financial globalization is manifested mainly financial institutions and the globalization of business expansion in-international financial markets, and so on. The globalization of financial institutions, mainly through cross-border bank's international operations and to promote cross-border mergers and acquisitions. The large-scale development of cross-border banking has brought a worldwide increase in financial efficiency, but it also increased the risk of the financial system, so that financial risks in the international transmission of more frequent.Learn from other countries and regions in the foreign bank entry and supervision practices and guidelines for the study of the introduction of China's strategy of foreign banks is very important.On the one hand, we have to line with international standards, must be familiar with international rules and practices; In addition, a sound financial regulatory system as well as with China's markets in developed countries in similar situations in developing countries and emerging market countries, regions, some of their successful experience of China has an important significance as reference. In accordance with the principle of national treatment for foreign capital bank supervision should not be a specific topic. For a developing country like China, the financial system is not perfect, foreign banks and domestic banks, there is a big difference, the former have a stronger financial innovation, wide range of conduct-balance-sheet business, extensive use of derivatives, which have more motivation to avoid regulation, allowing a greater degree of difficulty of their monitoring. Therefore, domestic banks and foreign banks was significantly higher than the stage presence of foreign banks set up a special monitoring system will help to improve the efficiency of supervision.Multinational banks, commercial banks to conduct cross-border operation, therefore, cross-border supervision of banks theoretical basis, with banks or financial supervision and regulation theory, the theory is consistent. Theory of banking regulation is to clarify the reasons for the supervision of banks, as well as Why do we need in the modern economy and the emergence of a large number of banking supervision and other issues. Banking Supervision theory is with the economic, financial development and evolution.Finance is the core of modern economy, banks are the core of the financial system, the banking sector's development crucial to China's sustainable economic development. Therefore, in this context, we explore the foreign banks on the possible impact of China's banking industry to examine China's banks, the policy is in order to better resolve the current difficulties facing China's banking industry to help China's banking industry with the proper response to foreign banks to challenges and ensure a safe and sound operation of China's banking sector, which is the country's economic security, political stability, social stability is of great practical significance.Foreign banking supervision principles, contents and methods based on the World Trade Organization rules on market access and systems, the Basel Committee on the basis of the relevant documents, combined with the formation of national regulatory practices and international practices and rules. The basic principles of supervision of foreign banks, including the monitoring responsibility principles and regulatory policy principles. Regulatory elements can be summarized into three areas:market access, regulation, market, operational supervision and market exit regulation. Supervision of market operation which include capital adequacy, liquidity, loan concentration, scope of business and so on. Regulatory system, from a different division of point of view, there are on-site inspection and off-site inspection, a single consolidated supervision and consolidated supervision.The supervision of foreign banks in China, there are still many problems, and there is a great gap compared to other countries, mainly reflected in market access, market operations, market exit three links on the weak and inadequate.First of all, market access, in terms of access to an emphasis on hardware over software, access re-established formal establishment, the establishment of light, as well as access to geographic equity limits were unreasonable and so on; second, operating in the market areas, mainly for regulators the law is lagging behind, "super-national treatment" and "low national treatment," regulatory overlap of regulation, light risk regulation, risk assessment and early warning system is weak and more neglected the role of market constraints on banks. Finally, market exit links, the lack of a response mechanism to prevent the risk of proliferation, the lack of protection of the interests of depositors, as well as effective measures for different risk conditions, lack of prudential regulatory measures.Article to economics, finance, the relevant theory as a guide, through qualitative analysis of foreign banks, theory and examples of the method of combining, for foreign banks to the impact of China's banking industry in-depth studies. Foreign banks in China on China's state-owned banks and joint-stock commercial banks are affected differently, which led to China's commercial banks net interest income rate and the rate. of increase in operating expenses, while foreign banks in China, China's state-owned banks has also led to a decline in the rate of non-interest income joint-stock commercial banks, the rate of increase in non-interest income, as well as bad loans rise in the reserve ratio on the efficiency and stability of China's commercial banks had an impact.Pairs of cross-border supervision of banks have their own special reasons, namely, the internationalization of multinational banks to face more complex business risks, but also increased the risk of the international financial system. The theoretical basis for cross-border banking supervision, including financial market failures on the main (negative externalities, information asymmetry, etc.) and the theory of financial fragility, such as Minsky's "financial instability hypothesis," Diamond Dybvig model of bank runs, Stiglitz and others such as information asymmetry, said. In addition, cross-border supervision of banks have their own special reasons, namely, the internationalization of multinational banks to face more complex business risks, but also increased the risk of the international financial system. For "how to regulate" the operation of the theory, in practice most countries along the market access, market operations, market exit three links to await its turn. This is also in line with this framework for country-specific comparative analysis of operation, where some countries were selected to highlight. The current supervision of foreign banks in China, there are still many problems, the authors have made a simple analysis.Finally, learn the advanced experience of other countries, based on the authors proposed the establishment of a risk-based supervision, regulatory compliance monitoring, supplemented by content system. And by improving the external environment for China's banking industry to deal with the complexity of the financial markets. Among them, for the supervision of various aspects of China's current problems and put forward specific measures to the corresponding recommendations. |
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