A Study On The Legal System Of Financial Holding Company

It is well known financial business usually has higher asset-liability ratio. Once it is lost, it will lead to financial risks. Any financial institution goes bankrupt, payment chains is to be interrupted at the same time, and results in systematic, regional financial crisis accordingly. It is handful to the stabilization of macro-economic. So it is important to supervise and manage financial business. From "rigidity supervision" for 1929-1933 economic crisis to "financial liberalization" of 1970s, international supervision field comes through a course of releasing supervision, repealing Depression-era restrictions barring affiliations of banks, securities firms and insurance companies. On the other hand, there is increasing public concern about financial holding company, because it permits banks, securities firms and insurance companies to affiliate within a financial holding company structure. Through this structure, banks have a less restricted ability to purchase or establish securities broker-dealers and have the new options of purchasing insurance companies. Since 1990s, The model of financial holding company developed quickly. Therefore, the author tries to use comparison, demonstration and economy analyses means to approach the legal problems on financial holding company's capital adequacy, infra-group transaction and internal control. The dissertation consists of six parts, the main contents are as follows:Chapter 1 primarily deals with financial reforms of England, Japan and America. 1986 England promulgates , and 1999 America promulgates , repealing Depression-era restrictions barring affiliations of banks, securities firms and insurance companies in succession. The author thinks that according to and Securities law>, Stock firms, banks, trust firms and insurance agencies shall operate separately and be administered separately. Stock firms, banks, trust firms, and insurance agencies shall be established separately. But this separate is not absolute.Chapter 2 discusses the basic theoretic of financial holding company. Because the appearance of financial holding company, many countries have therefore adopted reforms aimed not just at dealing with problem banks but also-and more important-at strengthening financial holding company to reduce the likelihood of future crises. Theyhave firmed up prudential guidelines, establishing minimum capital requirements, adopting better systems to monitor asset quality and provisioning for bad loans, and imposing tighter limits on excessive concentration of risk. Many countries have also taken the crucial steps of giving financial holding company supervisors more power and improving the flow of information about financial holding company' financial health. The author brings forward some helpful advice for the development of financial holding company of our country.Chapter 3 introduces capital adequacy of financial institution. Requiring financial institution to hold a minimum amount of capital is intended to limit moral hazard by putting financial institution owners' money at risk. The Basel Committee on Banking Supervision's capital accord, introduced in 1988 and modified in 1997, recommended a risk-weighted capital-asset ratio of 8 percent for banks in developed financial markets and a higher ratio for banks in more vulnerable economies. It defined a system of weighting assets by credit and market lisk to avoid penalizing banks for holding low-risk assets. The authors also introduces of The Basle Committee On Banking Supervision, and contrast to America's law, points out the deficiency of our financial institution's; Capital Adequacy, and put forward useful advice for perfecting financial institution's Capital Adequacy.Chapter 4 analyzes legal system of financial holding company's capital sufficiency. The dissertation introduces