Legal Aspects On Prudential Supervision And Regulation Of Banks Under Financial Liberalization

Basle Committee confirmed that The Prudential Supervision andRegulation of Banks was the trend of the supervision of banks inthe future again in the September, 2000. The prudential supervisionand regulation of banks is the particular application of principleof prudential used in the financial supervision and the core contentof it is guaranteeing the prudential management of the financialinstitution and strengthening the resist power to the financialrisk at the same time. All these work to keep away and control thefinancial risk and make the financial institution runs steadily.It requires us to improve our financial prudential supervisionsystem on rule-oriented base under the situation of financialglobalization and banking open, which is the purpose of this thesis.The thesis contains three chapters. Chapter I,"The Prudential Supervision and Regulation of Banksis the Product of Financial Service Liberalization andStabilization of Financial Rules". On the academic base of WTOsystem and Basel Committee system, the prudential supervision andregulation of banks showed its effects from the case of avoidingthe financial crisis successfully in Denmark, so we get theconclusion that we should put the prudential supervision intopractice through legislation under the financial liberalizationand the entry of the foreign-fund banks. Chapter II,"Legal Aspects on Prudential Supervision in theBanking Rules of China". We have revised our banking rules toimprove the character of prudential supervision, but there arestill some unsatisfactory points in the system which will bafflethe efficiency of the prudential supervision and regulation ofbanks in China. The writer brings forward five legal aspects onbanking supervision, they are Legislative principles; Supervisionon market access; Information disclosure; Quit of commercial banksand Credit insurance system. Chapter III, "Suggestion to Establishing the PrudentialSupervision and Regulation of Banks in the banking rules in China".The writer gives the advices and the suggestions on how to establishthe prudential supervision and regulation of banks in China,especially contraposing to the legal aspects mentioned in thepreceding chapter. In view of the importance of the legal andfinancial transparency, we put forward the suggestion to consummatethe information disclosure in China. And we also suggest to createa suitable credit insurance system to resolve bank failures andprevent political and social instability.