A Research On The Coordination Between Central Bank And Banking Regulatory Commission Under The Separation Of The Two Tasks

Marked by the establishment of Banking Regulatory Commission on April 28, 2003, regulatory institutions set up separately in our country made a key step from theory to practice, which has realistic meanings to enhance effective regulation in our banking industry and strengthen the independence of Central Bank. Meanwhile, we are confronted the conspicuous problem of coordination between Banking Regulatory Commission and Central Bank. Supervisory and regulatory functions can only operate smoothly under the preconditions that the importance of coordination between Central Bank and Banking Regulatory Commission can be aware of, and unisonous technique can be applied properly in future work. Backed by the working states of Banking Regulatory Commission over the past two years, this paper makes an active exploration into the important subject on the construction of coordination scheme between Central Bank and Banking Regulatory Commission, from the perspectives of financial supervisory and regulatory theories and practice, at the same time, referring to successful experience abroad. On the basis of analyzing the importance of coordination, it presents all sorts of incongruous situations existing now, for the purpose of deriving a feasible scheme to construct an unisonous framework between the two bodies.On the basis of relevant financial regulatory theories, this paper analyzes the necessity of coordination between Central Bank and Banking Regulatory Commission, from the perspectives of natural relationship between monetary policy and banking regulation, specialties of banking industry, as well as the impulses resulting from three financial trends (globalization, innovation, almightization) confronted banking regulation. After an introduction to the coordination mechanism between Banking Regulatory Authority and Central Bank abroad, it summarizes some worthy experience for reference, combinates all sorts of incongruous situations between Central Bank and Banking Regulatory Commission established two years ago, and presents a comprehensive idea of constructing a coordination mechanism between the two bodies in all respects, including laws and regulations in macro aspect, managerial coordination in middle aspect, and concrete operations in micro aspect. Finally, it concludes that measures should be taken all round, including legislation, personnel exchanges, negotiation and coordination, communication of information, institutional construction, and so on.The conspicuous problem of regulatory coordination in our hanking industry can be better settled by the construction of a coordination mechanism between Banking Regulatory Commission and Central Bank all around. And the original purpose of establishing Banking Regulatory Commission to strengthen effective regulation in banking industry can be realized at last.