The Research On The Supervision At Cooperation Between Banking And Insurance

Currently, Banking and Insurance have cooperated on many realms, such as bank deputizing insurance, insurance fund settlement, insurance of bank's assets and customers, trusteeship of insurance assets and electronic commerce etc. The banks and insurance cooperated on some oral agreements mostly before, but nowadays, for the most part, they cooperate each other on some written protocols, and they cooperate by founding a financial holding company in some forms of cooperation. Both the cooperation forms of protocol and financial holding company can work more efficiently than a single bank or insurance company because cooperation will create scale economy.In the cooperation form of financial holding company, the bank and the insurance company have the common benefits, so they can cooperate easily, in the meanwhile many experts regard it as a more advanced form of cooperation. In the cooperation form of written protocol, the banks and insurance companies can not links so tightly just as the financial holding company, so it can not act consistently with each other, and the experts believe it will be washed out before long. In fact, in America, the big companies have become less interested in merging, even some big financial groups have begun to desert some subordinate departments and turned to an agency. The practice in America proves that both the cooperation forms of financial holding company and protocol can work well.Both banking and insurance have their inherent risks; the risks can be supervised and solved efficiently by a single CBRS (China Banking Regulation Commission) or a single CIRS (China Banking Regulation Commission). The cooperation between banks and insurance companies can confront with new risks going with the improvement of efficiency. The risks can be classified into two kinds: the basic risks and the risks that can diffuse the basic risks. The basic risks will do harm to the bank or the insurance company only. It includes the risk of associated swap, the risk of the weaker side losing his dominion, the risk of error amount of capital and the risk of invalid supervision. The second kind of risks will diffuse the basic risks, which means the basic risks will be diffused to other companies and even the whole society. The risks work through two paths: the company that is in the basic risk infects his partner, and his partner infects his other partners; the minor risk can be magnified to a serious risk by the financial lever. The two kinds of risks will react with each other and maybe result in a serious crisis.The cooperation of banking and insurance will output the risks that can not be resolved in current separate-regulating situation, so the Regulating Commissions have to design a system to regulate the mixed operations. In this article, it is believed true that mixed operation is a tidal current in the world, so the mixed-regulating system should be built gradually in China. For the sake of linking up with the current...