Research On The Legal Regulation Of Private Banking

Private banking is an independent financial institution or a branch of commercialbanks, which based on high net worth individuals to target customers and provideasset management business, customized financial services, and value-added servicesaccording to customer’s demand for wealth management. At present, Private bankingin China is a branch of commercial bank and organized approved by China BankingRegulatory Commission (CBRC), which has an independent business license and theimplementation of independent accounting. Because of the private banking belongedto the commercial banks and private banking business based on individuals, CBRCconsider private banking as the personal financial services of commercial banks toregulate in law.In this paper, the private banking as the research object, though researching andreviewing, it pointed out there are so many reality and the legal issues of privatebanking under the current personal financial services regulatory mechanisms. It has aconclusion that the current regulatory mechanisms is obviously inadequate utilityphenomenon for regulation of private banking business, and safeguarding legitimateproperty interest in order to stabilize the financial markets. Because of the issues thatthe existing regulatory mechanisms inherent limitations and the differences betweenpersonal financial services and private banking business, it demonstrated that thecurrent regulatory mechanisms for private banking and business regulation has asignificant non-adaptive. Above all the reasons mention, it has a necessary that build aseparate the Legal Regulation of Private Banking. According to the characteristics ofprivate banking and business, this paper based on the theoretical basis of legal theory,financial theory, and financial supervision theory, construct the Legal Regulation ofPrivate Banking including laws and regulations, administrative supervisionmechanism, the internal control system, industry organizations self-disciplinesupervision.The first chapter is about the private banking laws and regulations on the basis ofthe issues discussed. Research any legal issues can’t be separated theoretical basis. Due to private banking in our country belong to the exotic, it lacks of the historicalheritage and appropriate theoretical basis. In order to clarify the object of studyaccurately, firstly, this chapter introduce the form of institutions, the types of services,the system and risk of products in the private banking, and then constitute and designthe theoretical framework of private banking. Secondly, this chapter do a furtheranalysis for the relationship of the private banking and customer, and define the legalcharacter of relationship as contractual legal relationship. Finally, this chapterdescribes the reason of personal financial services mechanism applied and theregulatory requirements of private banking, in order to be useful for build the privatebanking regulatory.The second chapter is about the study of the existing regime practice privatebanking regulatory effectiveness. With a large the crisis of commercial bank privatefinancial products occurred, it certify that private banking has illegal businessbehavior, the lack of skills and the level of customer asset management, private clientrelief is weak, and customers seeking judicial relief and other practical difficulties andlegal problems, which shows the current personal financial services regulatorymechanism for the regulation of private banking and business failed to play practiceought utility. Therefore, the author considers the applicability of the current regulatorymechanism. Through in-depth investigation and research on the supervisionmechanism of personal financial services, there are inherent drawbacks in thesupervision mechanism of personal financial services, and the private bankingbusiness is more complex than personal financial services. It is concluded that thecurrent personal financial services mechanism is not suitable for the management andmanagement of private banking, and it is necessary to reconstruct the LegalRegulation of Private Banking.The third chapter is about the construction of the private banking system of legalregulation of path selection. This chapter is concerned with the maturity of thefinancial supervision of the legal system and the development of the private bankingin the countries and regions outside the country, and advice to construct the LegalRegulation of Private Banking including laws and regulations, administrativesupervision mechanism, the internal control system, industry organizationsself-discipline supervision in order to regulate private banking behaviors and protectthe right of customers. Legal norm is the core of the system, not only the behaviorcriterion of the private banking and customers, but also the executive standard and direction of the supervision. Supervision, as a national administrative control meansoverseeing social subject law, in accordance with regulations to implement thebehavior, and then protect the legal norms binding effect can be achieved. The internalcontrol system, industry organizations self-discipline supervision are the independentregulatory measures, which have the advantages of comprehensive and timely, andplay an important role in the initiative to prevent risks. According to thecharacteristics of private banking service autonomy and the innovative demand ofprivate banking, the legal system of private banks should have the legal value, such asfreedom, efficiency, fairness and justice.The fourth chapter is specific recommendations on the Legal Regulation ofPrivate Banking built. This chapter is based theoretical basis of legal normsarchitecture, combined with the properties and characteristics of private bankingservices, private banking proposal in a clear legal norms on the basis of the principlesof service recommended the development of a special code of conduct for privatebanking regulations, guidelines and restrictions for operating private bankinginstitutions acts indirectly protect the legitimate interests as "vulnerable groups" ofprivate banking clients. Meanwhile, based on the regulatory mechanisms of thevalidity and enforceability of the consideration in the context of a comprehensivereform of our country cannot be the financial regulatory system, designed from thedifferent dimensions of private banking services and supervision of the legal systemfit the current financial regulatory system, and to theory and financial regulation basedon the principle of administrative supervision system respectively, regulatory, internalcontrol mechanisms for the management system of autonomous self-organizationdesign industry presented a detailed, specific mechanism design.