The Development And Suggestions Of The Financial Holding Company Limited On The Trend Of Joint Operation In China

With the progress of economic globalization and financial integration, the trend from segregated operation to joint operation is more clear on world finance. As a mode of joint operation, the Financial Holding Company Limited (hereafter refers to as "FHCL") has become the target of many financial institutions. The FHCL has a long history in foreign country ,but it is still a new thing in China. With the China's accession to WTO, enhancing the research on the FHCL will have significant impact on the standardization of semi-FHCL, improving the financial productivity and the ability of competition of the Chinese financial institutions in the international market, as well as keeping away and dissolving the financial risk. The thesis is organized as the following four sectors:Sector 1 joint operation and its main mode in developed capitalist country In this part, the author firstly introduces the history of joint operation in developed capitalist country, i.e., the development of international finance from joint operation ( before 1929) to segregated operation(from 1930s' to 1970s'), then to joint operation (from 1980s' to now). Then the author indicates that joint operation is the mainstream of international finance, and analyses the reason.Secondly, the author introduces three modes of joint operation, i.e., the FHCL, Universal Banking, Bank-parent Company and Non-bank Subsidiaries, and analyses their strong points and shortcomings.Sector 2 the best mode of transition to joints operation in China is FHCL Firstly, the author points out the challenges which segregated operation in China faces, i.e., economic globalization, international financial pattern and internet economy have great impact on it, and segregated operation is not good to improve the financial productivity and the ability of competition and financial innovation. From the above, the author draws a conclusion that the trend of Chinese finance is joint operation. Then, the author indicates that the FHCL is the best mode for Chinese finance to transit to joint operation. One reason is that comparing with the other two modes, FHCL is more suitable for Chinese condition; another reason is that FHCL has advantage in joint operation, and it is also fit for the segregated regulation in china.Sector 3 the development of FHCL in China and the successful caseFirstly, the author introduces the definition of FHCL by Basel Committee, it refers toa financial group company that wholly or mainly provides its services at least in twosectors of bank, securities and insurance under one control right, and also indicatesthree characters of the FHCL.Secondly, the author introduces the development of the FHCL in developed country,including America, Britain, Japan and Taiwan, in which FHCL developed rapidly.Thirdly, the author introduces the development of FHCL in China. There are 3 sorts ofFHCL in our country: (l)the FHCL is founded by state-owned commercial bank,mainly refers to Bank of China, Industry and Commercial Bank of China andConstruction Bank of China; (2)the FHCL is formed by non-bank financialinstitutions, mainly refers to Citic group, Ever bright group and PingAn group; (3) theFHCL is founded by industrial and financial capital.Fourthly, as an employee of PingAn group, the author analyses the cases of PingAngroup.Sector 4 the risk ,problem and advice of the FHCL in ChinaIn this part, the author points out all kinds of risks of FHCL. The complexity ofcapital structure, organization structure and business structure of FHCL will causemany risks, including synergies dissimilated risk, unfair trade risk, financial risk, etc.Above this, the author analyses the proper problems of the FHCL in our country, suchas the lag of legislation, a lack of person with ability, the FHCL formed by industrialgroup out of regulation, and untrue public information.At last, the author puts forward some advices for the FHCL in China. There are 3steps to control the risks: (1) the FHCL should enhance inter-control system; (2) it isnecessary to constitute and perfect the supervision system on FHCL; (3)to create agood outer circumstance for FHCL.