Case Analysis Of Fudian Bank’s Illegal Operation Of Bond Settlement Agency Business

With the reform of China ’s financial system, particularly the pace of interest ratemarketization reform progresses, which make the quick development of the bondmarket.As an important position in the inter-bank bond market, the financial marketshave become increasingly prominent, it also will accelerate the pace of innovation. Inorder to make their development more growth and have more sources of profit, citycommercial banks enthusiastically added to the inter-bank bond market. In2000, thecentral bank introduced a bond settlement agency inter-banks, and allowed non-financialinstitutions to participate in the inter-bank bond market. To a great extent, expanding thescope of institutional investors.As the proportion of intermediary business revenue increased gradually, so eachbank also began to attent agency business widely. In some profit structure of the smalland medium banks, the profit share of the settlement agency business is more than thetraditional business.With the gradual deepening bond settlement agency businessdevelopment in the inter-bank bond market, the resulting problems are graduallyrevealed.Such as management lags behind, unable to meet the development needs of thebusiness. Coupled with China’s inter-bank bond market, especially the bond settlementagency business late development, the relevant laws and regulations to be furtherimproved, for various reasons led to the inter-bank bond settlement agency whenviolations operation occur, especially the bond market turmoil occurred in2013, had todraw attention and reflection on the inter-bank bond market.Bond settlement agency business is entrusted banks and other financial institutionsin accordance with other participants in the financial markets on behalf of its handlingbonds and other related businesses. Commercial banks bond settlement agency businesswill bring both opportunities for the development of certain banking operations, but alsohave some impact on the development of commercial banks. Especially category Caccount participating in the account, it should attract attention in the conduct of bondsettlement agency business. This paper selected Fudian Bank bond settlement agencybusiness irregularities occurred in the recent case to illustrate some of the problems ofbond settlement agency between banks and commercial banks reflects the existence of an internal management system loopholes and lack of awareness of operational risk,the main analyzed for internal controls and operational risk Fudian banks. Focus alsoanalyzed the role of the cases occurred-category C accounts. Through the study of thiscase that make some appropriate recommendations to make the inter-bank bond marketmore effective and safe operation.