| There were two important events exciting the financial cycle in 1999. One was that the Law of Financial Service Modernization was passed by the US congress, which mean that the separate run came to end in US. The other was that China and America signed the agreement that helped China be the member of World Trade Organization(WTO). Both the events led to a outlook that challenged the Chinese financial cycle. Our financial firms will compete with the international financial institutions which have the advantage of integrative operation after the WTO entrance. Since China takes the separate run, it is an unfair competition. To be survive in the international coi~npetition, our financial institution must be reformed. One of the key reform is to realize the financial operation institution transforming from the separate run to the mixture run. The purpose of this paper is to find some way in realizing the reform.The paper is made up of three chapters.In Chapter One, I review the relative literature and put forward my own theoretic foundation. Why should china take the mixture run? Is the mixture run for sure better than the separate run? The conclusion of these questions is the theoretic foundation for the policy planning. In fact it is very difficult to chose a financial operation institution .The separate run is good for risk- controlled, but it is harmfu.l for the efficiency improvement. The mixture run is the reverse side of that. It is due to risk-efficiency substitution for the financial supervise agency. The condition of history and present is an important element for a country to chose a better financial institution, which is fit for one country. In this paper, German and US are good examples to prove that the transition of financial institution is along with the change of the economic condition. From these examples, we can see what conditions have changed and how to make a risk-efficiency substitutable decision in German and US. c The mixture operation has become a trend because of the economy globalization and financial innovation, which weaken the advantage of the separate run and strengthen the importance of operation efficiency: It is a hot topic whether our country should temporize and change our separate run.In Chapter Two, I conclude that it is unfit for China to take the mixture run at present from my analysis in the view of institutional economics. The main institutional demand includes the instinct of bank to be survive and the competition after the entrance to WTO, which make the change possible in the point of efficient improvement. But the risk along with the mixture run makes the institutional supply impossible at present. The reasons are as follows: the first reason is that the banking is so important for the state-owned enterprise that the government will not allow the banking putting fund in securities market. The second reason is due to the property right of financial firm in China, which lead to "the high risk preference" of financial firm and take the function of "risk amplifier". The other reasons are the risk of immature securities market and the lack of risk-control skill due to the imperfect supervision.In Chapter Three , I note that although it is unsuitable for china to take the mixture run at present, it does not mean that the banking and the securities companies are forbidden to cooperate. In this situation, it is very important for bank and securities companies to cooperate in many fields. At present many kinds of cooperation are being taken by banks and securities companies. The cooperation is also encouraged by the supervision agency. But the potential conflict of interests weaken the efficiency along with the cooperation, which calls for the cooperation in the field of property right. In this level of cooperation, the common interests of bank and securities companies are beneficial to improve operation efficient.There are three models as examples of this kind of cooper... |
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