Study Of The Entry Regulation Of Foreign Bank And Impact On Chinese Banking

From1978, the development of foreign bank of our country has experiencedgreat and profound changes. All aspects of the regulation of foreign banks in Chinaeither in the legal system or experience are gradually developing. Recently theconferene held in Beijing for the supervision of foreign Banks in2012reviewed theaccession to the world trade organization for ten years, the banking opening to thesupervision of foreign banks, the deployment for the supervision of foreign Banks in2012. It shows the research of regulation of foreign bank has certain practicalsignificance. This study aims to analyze the role of foreign bank in China to Chinabanking industry, if there is any regulation transition problem, and the analysis of theentry regulation of foreign Banks in China where is it.This article changed the traditional econometrics model, adding a dummyvariable to describe the entry regulation, using the2004-2010China’s bankingindustry data through the least square method to find that the People’s Republic ofChina foreign Bank management regulation has great influence on China bankingindustry. But foreign bank control variables are not significant. Because the foreignbanks’ development in our country is still in the early stage. They have smallinfluence on all kinds of efficiency of our banking industry. This essay also analyzedthe entry regulation of foreign bank in other countries, such as America, EU, Canadaand Japan.In this paper, the conclusion is that China should continue to deregulate the entryof foreign bank and issue positive policies to promote the development of foreignbank. In addition to deregulation, China should set some policies to encourage foreignbanks in China to expand their business networks in China. In process, interest ratemarketization and capital account liberalization have to be continued synchronously.Finally, the regulation of foreign bank should be based on right stages. In the initialstage, to encourage foreign Banks to enter, and on the process China must take strictsupervision to prevent foreign banks to bring adverse impacts on the banking industy.