A Research Into The Supervision Of PBC's Financial Holding Companies

As the financial globalization springs up, competition in this area has become worldwide. A strict supervision may put financial institutions into inferior position in the face of competition. Therefore, most countries loosen their financial supervision and mixed operation begins to be a tendency in financial industries all around world. Characterized by operating separately while mixing as a group, financial holding companies not only enjoy the dynamic benefits of mixed operation, but also take in consideration of the current supervision system of separately operation and help to realize smooth transition of the current supervision system into a system of mixed operation. However, while gaining enormous operational income~, financial holding companies bring enormous risk. How to constitute a suitable supervision system for China's financial holding companies so as to effectively keep in control the risk brought by these companies? This is an important issue which brooks no delay. This author tries to give an answer to this question in hopes of offering some references for the theoretical researches and practice of the regulatory system of financial holding companies in China. This article includes four parts.1. Study on supervision of market admittance. On the basis of a precise definition of a financial holding company, the author studies the conditions of market admittance and the issue of supervision system of senior executives' qualifications.2. Study on sustained supervisions of financial holding companies, including supervisions on the ratio of capital sufficiency, regulations on related trade, design of systems of risk management and constitutions of internal control mechanism.3. Study on supervision of market withdraws of financial holding companies, mainly on issues such as assistances and responsibility range for subsidiary companies' bankruptcy.4. Study on innovations of supervision system of financial holding companies, including issues such as how to improve current supervision system, how to make innovations in light of the characteristics of the objects, and how to set up mechanisms for sharing information between industries.The logic relationship of all the study mentioned above is quite clear. The first three parts cover the overall process of supervisions of financial holding companies, while the last part focuses on the design of the regime of supervisions of financial holding companies. The four parts combined constitute a comprehensive safety network of supervisions of financial holding companies.The paper will employ the following research methods:i. The comparative method: this paper seeks to do the comparative studies not only on the regulating systems of financial holding companies at home and abroad but on those of developed financial markets in the countries/regions such as the United States, Europe, and Japan as well.ii. The legal economic analysis: both the contents of financial holding companies and the designs for the regulatory system in the law will affect the cost and yield of the companies; therefore, the paper will analyze the efficiencies of a few specific laws by means of economic methods.iii. Case studies: the causes and effectiveness of regulation will be examined in terms of practical application through the analysis of various regulatory and judicial cases concerning financial holding companies, seeking to strengthen the relevant explanation and make it more convincing.iv. The structural analysis: the discussion of the whole paper will be arranged in the sequence of the problems during the regulation with each chapter focusing on one problem. Specifically speaking, Chapter One offers the introduction of financial holding companies with proving that financial holding will inevitably be the choice for the future Chinese financial system and innovation on the basis of defining financial holding company, describing tits characteristics and types; chapters from two to five will deal with the regulations on market access for financial holding companies, persi...