Research Of Supervision Over Foreign Banks

Foreign banks in China have been developed rapidly since china take part in WTO. Foreign banks deepen the reform of banking industry and accelerate economy development in China. But this positive impact does not happen without effective supervision over foreign banks. Supervision over foreign banks relates to that if our country can find and prevent the risks in foreign banks operating and the possible international risks following their entrance. With banking industry being more open to foreign capital, the amount, volume and range of business done by foreign banks are widened. The influence on the economy of our country introduced by foreign banks is bigger and bigger. It means that the task of supervision over foreign banks is heavier and heavier. Moreover, foreign banks have rich experience in gaming with the supervision authority and finance innovation, so they are good at evading bank supervision and taking advantage of the leaks in supervision to engage in illegal activities. The task of supervision over foreign banks will be harder when the protection period is over and the risk management methods adopted by foreign banks under the spirit of the new Basel Accord. Our country has to take steps to utilize foreign banks' positive effect on our economy, prevent their excessive risk accumulation and maintain the steadiness of our finance system.This dissertation is comprised of four major parts. The first part introduces the theory of Finance Supervision and Banking Frangibility, then refers to the applicability to foreign banks. Combining with the condition of foreign banks in China, the second part analyses the influence to Chinese banks. The third part focus on the current condition of foreign banks and their supervision to show the shortages. The four part tries to put forward with the regulative policies and measures that agree with the state of our country and the international practice.