The Separation And Universal Financial Mode

At the end of last century, there is a new trend in the world's financial industry. Many developed countries abolished the restrictions on the business scope of the financial institutions, permitted their entry into other financial services. Majorities of world's countries adopted the same universal financial mode.This paper firstly reviewed the nearly 70-years history of USA's financial industry under the separation mode, which is the first kind of this mode in the world. Then it discussed the causes of the change from the separation financial mode into the universal financial mode. Author respectively analyzed this change from twoperspectives--the "functional finance" and the "institutional change model" of newinstitutionalist economics, pointed out the advantages and disadvantages of the two financial modes, and then introduced the operation frameworks in the universal financial mode and adjustments of the financial supervision.Whether China should change the separation mode in its financial services is a critical problem. At the last part author reviewed the establishment of the current separation financial mode in China, evaluated the present situation of the Chinese financial industry, and pointed out that there are high risks in Chinese financial services. Author concluded that the current mode is suitable to Chinese financial situation, China should continue the present separation financial mode; that China should strengthen the regulation of its financial industry and safeguards of financial risks; that its financial reforms should be speeded up to promote sound development of Chinese financial industry.