A Legal Study Of Chinese Financial Transition Period

The separate operation and separate management financial system is the basic regulation in China's financial field. It has ever played an active role to handle the inflation and the stabilization of financial market in mid-1990's. However, the marketing conditions have changed a lot at present. Firstly, the mixed operation system is widely implemented in the international finance, especially when the Financial Service Modernization Act was passed in 1999 in US, which indicates that developed countries tend to take the mixed operation. Secondly, according to the promises made for the entry to WTO, Chinese financial market will be gradually opened to the world and make itself a global and free market. This article focuses on the China's financial transition period and the limitation of China's financial legislative system, and then puts forward some proposals to improve our financial market. The whole article consists of three parts: preface, main part and ending. The main part is divided into three chapters.Chapter One, summarises the evolution history of management system of international finance, analyses the background and achievement. And then compares the difference between these two management systems in details.Chapter Two, firstly illustrates several forms of mixed operation system, and then summarizes the legislative changes of the mixed system. The most important part of this chapter is the causation of the current mixed operation system. In this part, we also investigate why the separate operation system can't be abolished immediately, and definite the period from separate operation system to mixed operation system as the transitional period.Chapter Three, analyses the financial legislation and supervision in our country and points out the problems of the China's financial transition period. Problems faced in the transition from separate to mixed operation system are illustrated as following: in the transitional period, it is a usual practice for a government to guide and supervise the mixed operation system with means of rules and regulations which are characterized with multi-legislative level, low-positioned angle; the weakness legislation on foreign banks; no relevant laws on financial holding company; and lackof deposit insurance system. The diversity of financial supervision weakens the coordination; the complex approval process of supervision causes low efficiency; the loose supervision on foreign banks also stops the implementation of mixed operation system in China. A legal frame for the mixed operation system is finally proposed in terms of financial legislation, supervision, the governance of financial folding company, and deposit insurance system.