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Research On Supervisory System Of Financial Holding Company

Posted on:2008-10-02Degree:MasterType:Thesis
Country:ChinaCandidate:Y TangFull Text:PDF
GTID:2166360215955477Subject:Economic Law
Abstract/Summary:PDF Full Text Request
Financial holding company is the product of"integrated-separated-integrated"financial operational process, is the carrier of integrated operation. The former integrated operation was stopped by the crisis in 1929-1933. And after that, most countries in the world adopted separated operation mode. With the changes in financial concept, efficiency other than safety becomes the core value in finance and the tendency of integration in financial industry gives impetus to the development of financial holding company. Since it was born, financial holding company has become a new organization mode for integrated operation. It has many advantages: increase the distributive efficiency of financial resources, satisfy customers'need for all-around financial services and strengthen competitiveness and innovation of financial institutions. In contrast to that important status, financial holding company has tremendous operational risks, which are not only the reflection and combination of single institution, but the variation of former risks. Besides, the comprehensive structure, complicated property relationships and diversification of business all together put new supervisory requirements forward.After studying the background of financial holding company development and the challenges it puts to supervision, it is easily found that"separated operation, separated supervision"has become a great obstacle to financial reality. The latest development in financial supervision system shows a profound system is a mechanical unification of external legal regulation an internal control, is a systematical organization of market entry regulation, operational regulation and market leaving regulation. In fact, such a supervisory system has already been made, what we should do now is to transplant it into the supervision of financial holding company. Influenced by financial integration, this essay argues the regulation of financial holding company in vertical view: market entry-operation-market leaving and in horizontal view: internal control-trade discipline-legal supervision. Following that idea, the essay is divided into five chapters. In the first chapter, financial operation model and financial regulation are concerned. From the historical angle, we may find financial holding company is one of the realization forms of integrated operation and different operation model decides different choice of financial regulatory system. Influenced by the latest supervisory idea, the necessity and specialty in supervision of financial holding company are discussed. In the second chapter, the essay studies the special risks financial holding company is faced with and specifies the definite supervisory tasks. To conclude, regulatory principles, contents and model of financial holding company are quite different from those of a single institution. In the third chapter, it is mainly concerned with the regulation of market entry, which is composed of the theory basis, the motivation and different forms of setting up a financial holding company. And then it studies the legal regulation of several countries. The fourth chapter discusses the most important sector in financial holding company supervision, that's operational regulation. Administrative level and efficiency of outer supervision decides the risks level. The harmony of legal regulation, trade discipline and internal control is a key factor in financial supervision. In the fifth chapter, how to leave market is the central topic. From the theory of public need, the market leaving of financial holding company is essential. And then build a supervisory system of"before-in-after"leaving to ensure the safety and stability of national economy. Finally there is a conclusion, in which contents of supervising the financial holding company are summarized.Under the frame, the essay goes into the specific contents of financial holding company supervision in detail. Regulation in market entry is the first defense line for safety. The type of institutions, the scope of business and the qualification of personnel are the key contents in market entry supervision. Regulation in operation and market leaving becomes the second and third defense lines respectively. Compared with the first and last defense lines, operational regulation is of great importance because it's moving while the other two are relatively stable. Success or failure in operational regulation decides whether the regulation of financial holding company succeeds or fails, which is decided in turn by the coordinating level of three rights: legal supervisory right, trade disciplinary right and self disciplinary right. Among the three, self-discipline is the basis, trade discipline is the safeguard and the legal supervision is the key. This structure avoids the regulation vacuum due to dissymmetry of information. In detail, operational supervision is made up of corporation administrative structure, internal fire wall and capital adequacy which are a reflection of risk-oriented supervisory concept. As to market leaving of financial holding company, from the theoretical angle of public need, it is quite necessary. The complete system is composed of risk prediction mechanism and measures of before-in-after leaving. To be exact, it includes preventive combination, help in crisis, takeover and rescuing deposit guarantee and heavier burden of holding company. Generally speaking, in order to get a full picture of financial holding company supervision, the former mentioned contents should be considered.Abundant latest domestic and foreign materials have been collected for this research. Reviewing and referring to the latest foreign study methods and concerning the domestic reality of financial holding company supervision, a personal research style is formed. Beginning with the relationship between changed legal regulation concept and financial operation model and traditional regulatory theory, based on the integrated operation tendency and innovation in supervisory concept, a conclusion is drawn: risk-oriented supervisory concept should take the place of rule-oriented concept. Relying on standardized analysis methods such as economic, historical and comparative analysis, a complete regulation picture about financial holding company is obtained. Meanwhile, a systematical analytical frame is set up.The author is inspired by the former research achievement in different fields, esp. the all-around risk control method in economic circle and is concerned with the topic for a long time. All these lay a solid foundation to overcome the difficulty in study. So the achievement of this essay involve: firstly, this essay restores the original picture of financial holding company supervision, realizes the aim of examining diversified regulatory measures in a vertical and systematical frame. Secondly, the essay excavates the theory basis for regulating financial holding company, makes theory storage for establishing rules and provides theory foundation to correct the present legal system. Thirdly, the essay caters to the new supervisory requirements, which are put forward by innovation of regulatory concept. Fourthly, this essay changes the train of thought to rebuild and correct present rules. Lastly, by responding to financial reality, the essay may help accelerate the merging of domestic and international supervisory rules.
Keywords/Search Tags:Financial Holding Company, Operation Model, Risk, Supervision, Legal system
PDF Full Text Request
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