| With the increasingly heating-up competition in the international financial market especially after China's entry into WTO, the financial service market will open up further to the outside world. The trend of comprehensive run for international finance will compact and challenge the separated run existing in China to a large extent. Under this circumstance, the most urgent issue is how to choose the way to develop China's financial sector. This article starts with studying the experience of financial system reforms in foreign countries, couples with the current situation of the financial market and financial operating system in China, and tries to find a target model witch is suitable for China's financial operating system.Chapter I : Banking, insurance, security and trust institutions are all confined to their separated and traditional areas and can't go beyond them. This is called separated operation. When they go into other's areas and are crossly operated, this is called mixed operation. Both of the two have advantages and disadvantages. The academic circles are debating more on this, particularly on the aspects of efficiency and risk. Most people argue that mix operation leads to higher efficiency and greater risk. But I think we should not take that for granted and summarize that in simple words, as separated operation and mixed one have different merits and drawbacks in efficiency and risk in different countries and times. Whether a country should adopt separated operation or mixed on should depend on the conditions of the country at that time. Mixed operation in China at present are restricted by many factors, including the level of economic development, the degree of financial marketlization, risk awareness of the financial institutions, the level of risk management, regulation of the security market, the environment of law enforcement, IT development and talents reserve, etc.Chapter II: As a matter of fact, the major countries have all experienced a financial reform once or several times in choosing separated operation or mixed operation. US adopted mixed operating system before 1933, and turned to separated operation with the implementation of GS Act. While in 1999 it returned to mixed operation. Japan went through a similar scenario of mixed-separated-remixed one. The practical experience of these countries might illuminate and enlighten us in the reform of financial operating system. According to the analysis, the following points should get our attention and thinking:1. The transformation of financial system is a process of negation of negation.2. When it comes to financial operating system, the criterion is not if it's good or bad, but if it's appropriate or not.3. The reform of financial operating system should progress step by step and succeed naturally when conditions are ripe.4. The financial legislation should play a key role in the reform of financial operating system.Chapter III: The financial operating system in China also witnessed a series of reforms. In 1989, the government began to regulate the financial market, enacting a series of laws and regulations, setting up supervisory institutions such as SSC and ISC and managing banking, security, insurance and trust sectors separately. The separated management of financial system has been basically shaped in 1998. But over the past few years, the separated system in China is somewhat loosened due to the effect of international trend of financial integration. The money market, capital market and insurance market are to some extent permitted to cooperate with each other by the government. Many financial institutes make Mixed Financial Conglomerate to extent their operation field. The banking capital and insurance capital also have access to the security market in some way and to some size. In practice, the way by which banking credit capital enters the stock market isn't fully lawful. In 2000,the size of China's banking credit money that entered the stock market amounts to 450-600 billion yuan. The large amount-most...
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