Financial Group Special Risk Of Regulatory Studies

Diversified operation is the world trend, one of most important phenomenon is the surgy development of financial conglomerate. The passage of the financial Modernization Act of 1999(FMA) fully support this kind of diversified operation, and will produce another surge of financial conglomeration. In 1995, a commercial banking law was established to prohibit bank to invest in non-bank financial institute and other industry, since this law the financial industry in china is divided. Owing to historical reason, not stringent law enforcement and increasing financial deregulation, there are some business co-operation among bank, security and insurance, and there exist a number of financial conglomerates in china. Diversified operation is the inexorable trend in China financial industry, conglomerate model is a realistic option. But there are also a lot of risks and problems with it, how to know these risks and how to set up a framework to supervise them are urgently needed to study and solve.Starting with general demand of theoretical and actual financial regulation, from the perspective of supervisory authority, this thesis investigates the risks of financial conglomeration. These risks include risk contagion, capital double gearing, non-transparency which results hi regulatory difficulties, conflict of interest abuse and so on. Then, on the basis of these risk's regulatory theories, the thesis mainly examines these risk's supervisory principles and methods and institution, this is the main content of this thesis including consolidated and separate regulation technique, supervisory principle and measurement techniques of capital adequacy, supervisory principle and techniques of intra-group transaction and risk concentration, setting up supervisory authority, supervising conflict of interest. At last, in view of existing problems with china finance conglomerates, the thesis produces a supervisory framework for china conglomerates, and discusses supervisory authority reform, points out the risks of hasty reform. Furthermore the thesis brings forward prudential process of institute reform in china.