The Study On Market Access Rules For Foreign Banks

With the development of liberalization and globalization of finance, the problem of market access for foreign banks has become the focus for the countries to open their financial markets. Here, market access for foreign banks stands for the totality of lawful conditions imposed by host countries against other countries' banking service entry. The research shows market access legal system mainly contains the forms of entry, the conditions of entry and the scope of entry.In view of market defects in economic theories and state economic sovereignty in law science, market access fits both the inner need of economic development and the need of law theory. But improper regulation of market access may form market access barriers which diminishes common interests from financial service trade. Therefore prudential supervision is needed in which WTO agreements and Basel System play a common guidance role around the world.Treatment standards are a core issue in market access legal system for foreign banks. At present protectionism, reciprocal treatment, national treatment and MFN treatment are the main standards in the world. Which standard a country may employ totally depends on the need of domestic interests. The author concludes China should take the reciprocal treatment for foreign banks' entry. Yet it's not based on national treatment but based on differential treatment, according to which China should reconstruct its market access legal system for foreign banks. At the same time China, complying with the Promissory Note must learn from Basel System to perfect its market access rules out of guarding against risk.Concretely, as for legislation structure, make the single Regulation of the Administration of Foreign Banks in which the representative agencies of foreign banks should be incorporated; with regard to the forms of entry, make strictness rules for foreign branches' and subsidiaries' entry, limit the maximum shares when considering the investment entry and perfect the rules against monopoly; concerning the specific conditions of entry, pay more attention to applicants' international lists, introduce four-eyes principle for enhancing corporate government, explicate the standards of effective supervision and sign agreements with home country so as to reinforce message exchange; as to scope of entry, appropriately grant reciprocal national treatment, but separately authorize foreign banks' RMB business by referring to Singapore's and HongKong's grading system of foreign banks.