The Competitive Environment Faced By The Medium And Small Banks In Our Country In The Law Angle Of View

With the promotion of economic system reforms, the market has posed a more obvious need to the development of the banking industry. Since the restructuring of the Bank of Communications, 12 joint stock commercial banks have been established such as, Citic Industrial Bank, China Merchants Bank, Shenzhen Development Bank, China Everbright Bank etc which has changed the national single banking system and has satisfied the requirement of the diverse financial services in the system. This has filled up some blanks in some financial sector to a great degree. The defects of the system design, the drawbacks of the mechanism, the bad competitive environment and the unfair rules have resulted in the block of the further development of the medium and small banks. The banking market is a highly monopolized one in which the state-owned banks occupy the monopolization position and the foreign invested banks enjoy some over-national treatments while the medium and small banks have no such treatments at all. However the development of the medium and small banks will administer to optimize the structure of the banking industry and advance the whole level thereof in China. We should launch on the development of the medium and small banks in two aspects: one is to improve the competitive surroundings that they are facing; the other is to enhance the self-ability in competition. This paper mainly discusses the competitive environment esp. the legal environment which the medium and small banks are facing and put forward some pertinent legal suggestions to improve the competitive environment. This thesis is divided into three parts. Part I is the analysis of the overall legal environment that the medium and small banks are facing in the macroscopic perspective. According to the law, the administrative law and the departmental regulations, the paper systematically analyze the competition environment facing the medium and small banks and the demerits caused therefore from three aspects, namely, market entry system, supervisory policy and the market exit system. Part II is the comparative analysis of the banking surroundings in China in the microcosmic perspective. The state-owned commercial banks, the foreign-invested commercial banks and the medium and small commercial banks constitute the main entities in the banking market. In the banking market, at the beginning of the reforms, the government has given the foreign banks many favorable policies, such as the registered capital, kinds of products, the management pattern and the supervision and taxation and etc. in order to attract the foreign investment, which have brought up many disadvantages to the medium and small banks in our country. At the same time, the state-owned banks monopolize the banking market and also take many favorable policies from our government such as using the state credit as the backing management, taking the state recessive deposit insurance system, dealing the bad capital by the major four assets management corporations, the complementarities of the capital from the state treasury and taking the monopolization authority in some product variety, etc.. The monopolization of the state banks leads to the inadequate competition in the banking market and obstruct the development of the medium and small banks. Part III refers to the legal suggestions to improve the competitive environment that the medium and small banks are facing. To improve the competitive environment, we should begin from the macroscopic level. As for the banking entry system, the government should reduce the banking registered capital and establish the justice examination rule to supervise the banking regulatory organization; as for the bank supervising system, we should implement the WTO principles, take efficiency aspriority, conform the supervising law in existence and legislate the lack supervising law; as for the banking withdrawal system, we should accelerate the legislation, enhance the function of the market in the exiting of the banks and establish the deposit insurance systems to cater to the medium and small banks. From the microcosmic level, the government should impose the articles that are utilized to protect the benefit of the developing countries to protect the developing medium and small banks. For example, we can take "the asymmetrical principle"and "safeguards clause", to eliminate the over-national treatment of the foreign banks. As for the monopolization of the state banks, we should legislate the anti-monopolization law of banks to restrict the highly monopolization of the banking industry in our country to create a fair, regular and sufficient competitive environment for the banking industry.