Preliminary Study Of The Banking And Securities Industry Cooperation

At the end of 20th century, the mixed operation of financial industries became the mainstream in many developed countries with the global trend of financial innovation and integration. China scrapped its restrictions on financial industries for foreign institutions in December 2006. More and More international financial giants specialized in mixed operation are merging into Chinese market, which brings significant challenges to local financial institutions and watchdog. Whether the mixed operation of financial industry is appropriate for China; if yes, how China should transit its financial system from separated operation to mixed operation steadily have become the main subject for theorists and top governors.Currently, the separated operation of financial industry in China is necessary for immature market and imperfect supervisory mechanism. However, regarding the economic theory and the experience in developed countries, the mixed operation will become the main direction of Chinese financial industry. Consequently, the subject is significant not only in theory but also in reality.This paper, starting from the reality in China's financial industry and based on the experience summarized from those developed countries, puts forward that strengthening the collaboration between banking and securities industries and constructing financial holding companies to push for the transition from separated operation of financial industry to mixed operation. Furthermore, the author predicts the potential risks in the collaboration of banking and securities industries under the framework of financial holding companies and suggests the appropriate supervisory mechanism.