Research On Regulation Law Problems Of Direct Bank In China

With the continuous development of Internet technology and financial markets, financial disintermediation has become a new trend, direct bank has come out as well. China’s direct bank has been developing rapidly since it first appeared in 2013. With the advantage of convenient, quick and beyond geographical, it attracted many customers, and brought a new development direction for the banking industry. It was because of virtuality and mixing characteristic that direct bank has to take more technology risk, liquidity risk, systemic risk and legal risk than traditional bank, which could be a threat to the legitimate rights and interests of financial consumers. The current legal regulation in China, however, is not specifically aimed at direct bank. The existing regulation law about online bank and electronic bank is aimed at supervising the business that combines the traditional Banks and network and derived service. And moreover, it already unappeasable for direct bank regulatory. At the same time, China’s financial regulatory system is suffering challenges that come with financial reforms caused by direct bank, some strict regulatory measures is now inappropriate because they may limit the reasonable innovation and progress of the market. For the sake of the successful development of direct bank, supervision legal system is imperative. To this end, the author starts from the investigation of direct bank’s current situation and discusses the necessity of regulation on direct bank, then analyzes the problems in existing supervision law. Combining the actual situation in China and other countries’ successful experience, the paper put forward some corresponding suggestions, in order to promote direct bank’s perfection of legal system. Apart from the introduction and conclusion, this paper consists of five parts:The first part makes a fundamental interpretation of China’s direct bank. Having an objective and comprehensive cognition is the precondition of research, the author therefore defined the concept of direct selling bank from connotation and extension firstly. And the author thinks direct bank is an independent and new banking model, which could provide banking products via virtual network without any physical limits. After a detailed investigation of direct bank, the author found there are many problems despite the good prospect of China’s direct bank.The second part analyzes the necessity of direct banking supervision in China. The author starts with illustration of direct bank’s technical risk, liquidity risk, legal risk and systemic risk. And the paper discusses the necessity of the supervision from the view of risk. On the other hand, the author analyzes the necessity from the perspective of financial consumer’s security right, the right to know and right of relief.The third part investigates the legal supervision of China’s direct bank. The paper points out five main problems, including restriction on remote operation caused by “face to face” system, and difficulty to acquire independent legal person qualification, challenges to dividing supervision by mixed development, and incapable risk control, and insufficient protection to financial consumer.The fourth part uses foreign countries’ experience of direct bank law regulation for reference. The author mainly introduced the development of direct bank and related laws in Germany and the United States. Then suggestions about reference that mentioned above are put forward on the basis of China’s reality.The fifth part proposes the perfecting suggestion to China’s regulation law of direct bank from five aspects. The first one is to establish a direct bank access system; the second is to break through these restrictions of "face to face" system; the third is to perfect the risk supervision system of direct bank; the fourth is to build a coordination system of financial regulation under dividing supervision; Five is to improve the protection system of financial consumer.