The Effectiveness Of Banking Supervision In China Research

On December11, 2001, China formally became the 143rd member of WTO. According to the commitments China had made in financial service trade for entry of WTO, the foreign-funded banks will enjoy a total national treatment by the end of 2006, China will start to stay in the internationally economic trade and financial setup. With the increasing approach to complete openness, a series of so significant propositions for China's macro-finance have attracted more outstanding concern of the theory circle and the industry communities, as well as the focus of international society, such as how to guarantee financial stability in China while pushing forward remolding the financial configuration? How to maintain the national financial sovereignty and financial security in the open-door process? Among these problems, banking supervision effectiveness becomes much more outstanding under the new situation, particularly, such problems as the coordination cost, supervision efficiency for banking supervision, have affected the financial innovation and the development of China's financial industry.In this paper, a careful review of the history and development stages for world banking supervision and China's banking supervision is made first of all, summarizing the characteristics of each development stage, and a conclusion is drawn comparing to the developing procedure of China's banking supervision that a specialized regime for China's banking supervision has preliminarily be formed. On making a systemic study on banking supervision theories, the author uses principles of information economics, entrust -agency theories, etc. and a synthesized analysis is made on banking supervision theories, answering the nature problem why there is banking supervision. A general introduction of regulatory theory and practice is made in the paper, concentrating to make a thorough analysis on the existing problems in China's banking supervision, starting from the essential contents of baking supervision effectiveness and six standards for effective banking supervision proposed by CBSC, combining the existing outstanding problems and conflicts in the practices of banking supervision in China, and in the end four main aspects of standards are given for judging the effectiveness of banking supervision. Comparing with these standards, assessing the effectiveness of the present banking supervision in China, a conclusion is made that the effectiveness of the present banking supervision in China from a macroscopic view is rather good, for example, total stability in banking. But seen from the microscopic view, no effect analysis and assessment is made for banking supervision, and the efficiency of banking regulators themselves and the market efficiency of the regulated object are to be improved, therefore, the total effectiveness of banking supervision in China is not high. In the thesis a thorough analysis is made on the factors influencing China's banking supervision effectiveness, on the basis of which, suggestions are made for accelerating the effectiveness of banking supervision in China: to renew banking supervision conceptions and rectifying the focuses for banking supervision; to perfect the means for banking supervision so as to increase banking supervision level; to pay much attention to cost- effective analysis on supervision; to consummate banking supervision system in order to put the regulatory role of market binding into play; to foster a healthy banking supervision environment; to establish an effective coordination mechanism for banking supervision, etc.