Research On Corporate Governance Legal Mechanism Of Financial Holding Group

As the rapid development of socialist market economy in China, an increasing number of financial innovations established in the market, such as financial holding company. The emergence of financial holding company, whose core meaning is to put the parent company the power of control to its subsidiary company which is subject to external forces of parent company to control or unified management from the parent company, based on the pursue of economies of scale, economies of scope and synergies. Although we insist on implementing strict separated financial operation, financial institutions have always been exploring the financial mixed operation, forming forms of organization which are similar to financial holding groups. During this process, because of the different interest among various special groups, the governance failures in financial holding companies continue to emerge. Besides, the outside feature of financial risks is also a contributing factor of risk transmission among subsidiary companies. Therefore, the ways to protect the legal rights of creditors of financial holding companies and to carry out the harmony between internal governance of parent companies and subsidiary companies have become the most significant issues in the development of financial holding companies. Due to the inherent lag of the law, these new issues have yet to be resolved, so as far as I am concerned, it is necessary to do relative research on that question. As a result, this is my thesis which can be divided into four parts.The first chapter is a summery of basic theories of financial holding group, in which the existence background, concept, characteristics, and the reason of development have been discussed. The existence background section uses development process of Minute industry and Mixes industry as a main line, systematically put the development of financial holding group in different countries together, in order to illustrate its historical sequences of ideas. This chapter utilizes vocabulary analytical methods to illuminate its concept: "what it is", in order to make people understand the concept of financial holding group. What's more, the section of characteristics and reason of development explained the significance of financial holding group in our country, vis-a-vis, "why are they developing so rapidly?"The second chapter is an analyze on the particularity of company governs of financial holding group. With reference to ordinary company governance, it has been a platitude for a long time; but the particularity of financial holding group, can never compared with that of ordinary company. No matter which perspective we choose to observe, company governs of financial holding group is a strengthen to that of ordinary company. It is too complicated, that we have to comprehensively analyze it with knowledge of group governance. From the changing target of company governs to the problems of company governs of financial holding group, it is showing us all the time, there is no doubt that such groups poses all the characteristics of aircraft carriers, ordinary regulations and laws can never touch our powerful antennas.The third chapter discusses the core theories on the establishment of system of financial holding groups. The large foundation of core theories is State Intervention, while the proceeding level is the Form Rationality. So what is the basic value orientation of our country's legislation? This passage suggest that the basic value orientation should be "realism of the maximum efficiency under the premise of safety". It is necessary for us to analyze the experiences in other countries and regions. According to the subprime mortgage crisis in 2008, we have learnt that the responsibility of financial law is severely insufficient, and we should do as much as we can to innovate the legal responsibility of financial holding groups. The reason that we put the innovation of responsibility into core theories is that the reality told us it will never be too important.The forth chapter of this thesis comes into the question "what can we do to solve the problem", vis-a-vis, the way to fulfill the legal process of company governs. This chapter will analyze some important legislation approaches by discussing internal governance and external governance, in order to give some advices to our country's legislations. There are plenty of similarities between China and the US, so we can study their valuable experiences to improve ourselves. Concretely speaking, ways to perfect our mechanism are as follows. Firstly, the party's vertical management system should be clear and standardized; secondly, the ownership governance system inside groups should be maturity; thirdly, firewall systems should be introduced into financial holding groups; fourthly, separate direct systems should be built up; fifthly, legislation of Lawsuit should be promoted; sixthly, regulations on information disclosure should be improved; seventhly, legal responsibilities of parent company of financial holding companies should be strengthened, eighthly, revolution on market withdrawal should be implemented; ninthly, autonomy rights system of investors should be set up.