Research On Juristic Issues Of Supervising Foreign Capital Banks

To carry out the commitments made when China joined WTO, geographical and clients restrictions in regard to the Renminbi business have been removed since December 11, 2006, together with all other restrictions which are deemed non-prudential. In the meanwhile, the State Council has issued the revised Regulation for the Supervision of Foreign Banks, and the China Banking Regulatory Commission enacted the implementation rules accordingly, this rule is to be used as the main legal documents for the supervision of foreign banks after the market is fully opened to foreign banks. Needless to say, there are spaces for improvement in many aspects due to the constraints of its contents and the level of issuer. With the coming of the foreign banks who are known to be well-managed and powerful, it has been an important topic that how to reinforce the supervision of foreign banks to ensure the soundness and health of domestic financial industry, in order to further enhance international competitiveness of Chinese funded banks, and realize the goal of internationalization of the financial industry by introducing Foreign investment. As pointed out by China Banking Regulatory Commission in its report named Report on the openness of China Banking Industry in March 2007, "in the next stage of openness, the supervision standards will be consolidated for both foreign banks and Chinese banks as a priority, especially consolidate the rules applying to foreign banks registered in China and the rules applying to Chinese banks, in order to create a market environment for fair competition." Based on the current situation of the foreign banks supervision, while keep an eye on the advanced international supervision experiences, this essay is trying to answer the following questions from legal perspective by raising question, analyze question, and solve the question: whom to be supervised, what to be relied on for the supervision work, and how to supervise. This essay is divided into 5 parts: Chapter 1 gives a brief introduction on foreign banks; Chapter 2 has analyzed the rules which have validated the supervision work of foreign banks from domestic and international law perspective. Chapter 3 has focused on the retreat of foreign banks, put forward the suggestion that Deposit Insurance need to be used to ensure the safety in this process; Chapter 4 has analyzed the supervision issues under the background that many foreign capital hold shares of the Chinese banks. The last chapter has touched on the topic of the supervision on the mixed operation in view of the trend of the foreign banks.