Research On Banking Supervision Reform In China Under The Background Of The International Financial Crisis

Commercial banks are the main body of finance system in our country, theoperation stability of its structure and mechanism is important to the healthydevelopment of the national economy. The bankruptcy of the new century companyin April2007marked beginning of the mortgage crisis. The main reason is the stackeffect of the real estate market and the federal funds rate. They directly caused thebank default rate raised, asset securitization products were unable to pay and thebank failures. Another important reason that can not be ignored is relax prudentialsupervision principle and lack of supervision of the financial derivatives. Its badinfluence on the global economy still exist. With the deepening of financialglobalization and integration, the banking risks and challenges of our country willcontinue to expand. The crisis gives us an opportunity to promote the bankingsupervision of our country.In order to deeply understand the status and role of banking supervision systemin our country, further improve the supervision mechanism of the commercial banks.Through the comparative research, normative analysis and empirical analysis andother methods, combined with the present stage of supervision mechanism ofcommercial banks and further find out the suggestions and measures to improvebanking supervision mechanism.The first chapter of the paper explores technical and economic characteristics ofcommercial banks and the necessity of the supervision. First introduces theconnotation of commercial bank supervision, followed by the technical andeconomic characteristics of commercial banks. Secondly, the bank supervision plays an important role in stabilizing the financial order, improving financial efficiency.Thirdly, the effective banking supervision is helpful to prevent the spread of thefinancial risk. Fourth, the banking industry has strong partial information. Lastly, theconnections of financial institutions strongly require banks to strengthen supervision.The second chapter analyzes the formation mechanism of the internationalfinancial crisis and the enlightenment of the banking supervision. Firstly, theprosperity and recession of real estate market. Secondly, the benchmark interest raterises after the first drop. Thirdly, the mortgage bonds and guarantee certificate ofindebtedness adding fuel to the fire. Fourth, the commercial banks relax prudentialsupervision principle and lack of the supervision of the regulators. Because ourcapital account openness degree is low, the direct impact of financial crisis is not big,but still make loan quality of commercial banks face greater uncertainty, middleincome is also affected. This chapter further pays attention to focus on potential risksof commercial banks.The third chapter mainly analyzes the supervision of our banking industryhistory, present situation and existing problems. The present situation and thequestions are told from five perspectives that is regulatory tools, supervision content,supervision means, supervision mode and supervision coordination mechanism. Inthe fourth chapter then put forward the solutions. In the supervision tools, first of allsupervision of the commercial bank’s internal control system should be strengthen.Then gives full play to the external control system of banking supervision includinginternal perfect risk management mechanism, supervision of personnel’s behavior,guard against operational risk. The external control mainly includes graduallyconsummates our law system of banking and strengthen the information disclosure.In the regulatory content and scope, we should focus on the market access andmarket exit. In the supervision means, the paper puts forward some specificsuggestions of the on-site inspection and off-site inspection. In the supervision pattern, the mixed supervision conditions of our country are not mature. We can tryto establish a financial coordination commission to supervise some financialinnovation products. In the supervision coordination mechanism, we should furtherstrengthen the standardization of the joint meeting system and make the informationsharing be the institutionalized arrangements.