Research On Legal Problems Of Private Banking Of China

As a result of global economic downturn, the rate of Chinese economic growthhas slowed down year by year. That requires a further reformation in banking businessto significantly enhance the comprehensive strength of financial industry, whichmentioned by both in‘18th CPC National Congress’ and in ‘the twelfth five yearplanning of Financial sector development and reform’. Though there has been madeoutstanding achievement in development of private banking in china in the past sixyears, it is still in the relatively immature stage, because a series of complex legalproblems have not been solved by now. It is necessary to analyze the opportunitiesand challenges that Chinese private banking has been facing from a legal perspective,which will be helpful to improve effective legal system of private banking.The body of this thesis consists of four chapters: the first chapterintroducessomebasic information about Chinese high net wealth people who are the target clients ofprivate banking. From this part, we could know the ways in which high net wealthpeople accumulate their wealth, the industries they are getting into and the investmentgoals they are planning to achieve.Chapter two describes legal problems arising from the development of privatebanking. Firstly, private banking has not been defined legally and there are no specificregulations for its business. Compared to the wealth management of commercialbanks, large difference could be found between private banking and wealthmanagement. Consequently, it is inappropriate to instruct and regulate private banking by regulations of wealth management. Secondly, the separateoperation of financialindustry has resulted in great difficulty for private banking whileinnovating financialproducts and providing personalized products. Thirdly, the legal relationbetweenprivate banking and its clients has become a heated topic in academe, yet noconclusion has been made.The last but not least, the realistic difficulties ofanti-money laundering is closely related to the limitation of current regulation, whilethe regulationhas conflict to principle of client confidentiality.Chapter three draws lessons fromforeign excellent legal system for privatebanking. Chinese private banking can benefit a lot from foreign experiences. Forexample, we can learn from America on its financial supervision system andthenstrengthen ours.Chapter four is some advices on how to deal with the legal problems ofdevelopingprivate banking. The effective financial supervision system should beestablished and the legal relationbetween private banking and its clients should bechosen according to their own will and so on.