Construction On The Risk Prevention Legal System Of Chinese Financial Holding Companies

In the latter half of20th century, as the financial globalization pushed forward and international competition in the financial field became more intensee, the comprehensive finance was gradually agreed by most countries,so the financial holding companies emerged as a new forms of highly efficient organization. There is no specific legislation on the financial holding companies in China, but in reality exist there have been a wide range of financial holding companies. Financial holding company is the fatal choice for Chinese finance to transfer from the "separate operation" to "mixed operation". The financial industriy itself is a high-risk industry which relates a country’s economic lifeline, and the financial holding companies usually adopt the parent-subsidiary holding organization, have large scale, do cross-regional business, therefore, the risk of financial holding company’s is particular and complex, and of great significance for a country’s financial security and market stability. As our country have no specific legislation on the financial holding companies, it is of great significance for research on the construction of risk prevention legal system of financial holding companies. Learning from advanced international experience, and combined with China’s financial practice’s need, this paper discusses the construction on the risk prevention legal system of financial holding companies from two angles of internal prevention and external prevention.Using the law and economics, comparative analysis, and the combination of empirical analysis and normative analysis, this paper discusses deepingly the construction on the risk prevention legal system of financial holding companies. This paper has four chapters as following:The first chapter discusses the concept and mode selection. of financial holding company First, this chapter defines the concept and legal characteristics of the financial holding companies, and describes the financial holding company types. Then this chapter analyzes that comprehensive finance is the only way for China’s financial industry. Finally this chapter proves that pure financial holding company is the best choice for Chinese comprehensive finance model.The second chapter analyzes the specific risks faced by the financial holding company. First this chapter analyzes the particularity of the risks of financial holding companies, and then explains the complexity of the risks of financial holding companies. Financial holding company is facing the risks of insufficient capital, conflict of interest, improper related party transactions, passing-risk, monopoly and transparency. China’s financial holding company is faced with its own unique risks. Risk analysis of financial holding company make the construction on risk prevention legal system below more targeted.The third chapter proposes the construction on the internal risk prevention legal system of Chinese financial holding companies The internal risk prevention legal system consist of the corporate governance and internal control system. This paper puts forword improvement recommendations for the defects of the corporate governance system of financial holding company in China. On improvement of the internal control system, the paper constructs a "twograde-four floor" internal control organizational structure, and brings forword proposals on the building of firewallThe fourth chapter proposes scheme on the external risk prevention legal system of Chinese financial holding company. First, this chapter analyzes the financial holding company pose challenges to the traditional financial regulatory system, then discusses the development of regulation approach and regulatory modes in the world. On the base of analysing the existing separate supervision system, this chapter adwances recommendations on the regulatory system of the financial holding company in China. Then this paper raises impromment suggestions on market access and exit legal system, capital adequacy legal system, information disclosure legal system and the increased responsibilities legal systemof financial holding companies.