The global economic turbulence caused by American subprime lending crisis in 2008 leaded people to realize the importance of international financial regulation once again. Consequently, the latest international banking supervision rule--Basel III came out. This new Basel Accord will be put into effect in more than one hundred countries around the world, most of which are also the members of WTO. China being the member of both WTO and The Basel Committee, and having already opened the banking industry to other WTO members, the new agreement will inevitably bring about significant impact to the supervision rules of foreign banks in China.At present, the latest supervision rules of foreign banks in China are Regulations of the People's Republic of China for the Administration of Foreign Banks and Implementing Rules of Regulations of the People's Republic of China for the Administration of Foreign Banks, which were promulgated by The State Council and CBRC in 2006. According to China's WTO accession undertaking, financial service departments promised that the prudence principle would be the only market accession criterion for banking industry in order not to set up other market accession barriers. Besides, The Basel Committee promulgated new Basle Core Principles to specify the prudence principles for banking supervision in 2006. Compared with WTO prudence principles and detailed regulations of Basel III, the supervision rules of foreign banks are still not well formed in China, and improvements are needed in the respective of banking regulation idea, information disclosure, relationship between host and home country; The domestic banking industry should improve innovative capabilities, strengthen the management of capital, and reinvent its business model so that it can improve its core competence and carry out the strategy of"going global".
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