Explore The Development Trend Of China's Financial Management System

Nowadays, international financial systems are in the direction ofchanging divided operation financial system to mixed operation financialsystem (or called universal banking system). However, Chinese financialsystem is quite different from that, which is a severely divided financialsystem. Reforming state-owned big four commercial banks (or called BigFour) is still in predicament. To deepen the reform of state-ownedcommercial banks needs to reform divided operation financial system.Changing divided operation financial system to universal banking systemis helpful to reform the Big Four. In this dissertation, the author discussesthe question from several aspects. Firstly, the author defines what a universal banking system actual is.There are two types of financial system, divided operation financialsystem and mixed operation financial system (or called universal bankingsystem). And universal banking system involves four types according toaccounting, which have different risk levels, the depth of mixed operation,and supervision conditions etc. Secondly, the author reviews the development of internationalfinancial systems. Liberalization of financial intermediary institutions hasbeen driving international financial systems to explore as many types ofbusinesses as they can, so universal banking emerged. In a historic visualangle, the change from divided operation to mixed operation is due tofinancial innovations and financial liberalization. Mergers andacquisitions (M&A) in financial fields are like a rising wind and scuddingclouds since 1990s. So many new big financial diversified servicesgroups come out. Their assets are large and keep increasing. They canoffer so many types of financial services, even any financial services, sothey are called universal banks. In comparative visual angle, differentcountries have different changes. For example, the change of financialsystem of U.S.A is different from that of Germany. Thirdly, universal banking system needs certain conditions andenvironments. Macro and micro conditions are fundamental elements.That means financial intermediary institutions such as banks should beoperated with perfect corporate governance, inside control mechanism,market competition mechanism and perfect legal system, and theimportant condition is effective financial regulation and supervision.Does a country have an efficient supervision system? Yes for mixedoperation, and no for divided. This is a necessary condition for universalbanking system. Besides, mixed operation will not lead to financialfragility. On the contrary, it will improve the inherent financial stability. Fourthly, as far as China is concerned, reform of state-owned banks isin predicament. There are several divided supervision authorities and theyexecute different functions respectively in light of different financialbusinesses. This supervision system is against the trend of internationalfinancial systems. There is so much difficult in reforming the Big Four.The Big Four have poor corporate governance. Their developmentshighly rely on government, and government relies on banks to supporteconomy development, which is abnormal phenomenon. The Big Fourcan't form perfect corporate governance because of interference fromgovernment. They can't form motive power for development too. How toreform the Big Four then? There are three viewpoints. The first one isabout property rights reform, which believes that equity owned by stateentirely is the root of problems that the Big Four are confronting. Sochanging the Big Four's capital structure is needed, and the next step ofreform is to divide property rights and list. The second one is aboutnon-property rights reform, which believes that operating mechanism ismore important than property rights reform. So bank reform should focuson operating mechanism's rebuilding rather than capital structuretransformation. The third perspective holds that changing asset structureis easy than changing capital structure, and the reform cost of the formeris lower than the latter. But there should be other r...