Study Of The Risks Of The Chinese Banking Mixed

In the end of 2006, China financial industry will be open to the outsideworld. At that time, financial industry, which was protected by the governorfor a long time, has no regard for the situation any longer. Confronted withthe mixed operational foreign banks and fierce competition betweenfinancial groups, Chinese bank industry also required to put mixed operationinto practice in order to enhance their competitive capacity. But academeshave different ideas about mixed and divided operation. The paper discussesthe risks and proceeds of mixed operational banks from the angles of theoryand demonstration. The conclusions are that firstly, the divided bankingsystem does not lead to financial safety and soundness, and the mixedbanking system does not necessarily result in risks but mixed operationwould strengthen the capacity of payoff. Secondly, the latency risks frommixed operation would be eliminated by internal control and externalsupervision. Finally, the paper analyzes the strategies of keeping away therisks of mixed operation.