| The intermediary business of commercial banks is referred to as the non-interest income business that doesn't influence the on-balance sheet assets and liabilities. The intermediary business, the asset management and the liability management constitute the major part of the total business of the commercial bank.Commercial banks of the western countries began to expand their intermediary business in the 1980s. With the rapid development of their intermediary business, the income based on the intermediary business has become an important source of the profits of those banks, accounting for 40% to 60% of their total income. This ratio is much higher in some giant banks. The intermediary business can not only improve the quality of the banks' assets and liabilities, but also increase their profitability. In recent years, with the reform of China's financial system and the development of its economy, Chinese commercial banks have paid more attention to the intermediary business, because they began to realize its important role. They try to provide their customers with new services through continuous financial innovation. As a result, their intermediary business has improved a lot. However, compared with that of the banks of western countries, the intermediary business of Chinese banks is far behind in terms of both quality and quantity. In order to accelerate their innovation, perfect their services, and strengthen their core-competency, China's central bank published "The temporary regulation of the intermediary business of the commercial bank" on July 04, 2001, which is made up of 29 clauses, prescribing the definition, the approval system, the approval procedure and the fees and commissions of the intermediarybusiness.Based on this temporary regulation, the thesis compares the conditions of the intermediary business between Chinese commercial banks and foreign commercial banks. It expounds the necessity of improving Chinese banks' intermediary business through case analysis and economic analysis, and provides some tentative suggestions about improving Chinese intermediary business. The thesis consists of four chapters. The first chapter mainly explains the concepts, classification, features, the positive effects and negative effects of the intermediary business. There has been a controversy about the definition of the intermediary business among the Chinese experts for a long time, the main disagreement of which is about the relationships between the intermediary business and off-balance sheet activities. To solve this problem, the temporary regulation makes a clear definition: The intermediary business consists of the business based on approval and the business based on filing. The former includes 10 categories that are related to either contingent claims, or securities and insurance. The latter includes 15 categories that are all financial services, which don't create any contingent claims. The intermediary business related to non-contingent claims has the features as follows: low utilization of the self-fund, low risks and high profitability. But the intermediary business related to contingent claims has different features: high degree of freedom, low transparency, high leverage ratio and high centralization of trading. Generally speaking, the intermediary business is helpful to improve both the quality of the assets and liabilities and the profitability of the commercial banks. However, the risks of the business related to contingent claims may be very high when it is misused or the supervision is insufficient.Chapter 2 focuses on the comparison of the intermediary business between the Chinese commercial banks and foreign ones. In recent 20 years, the intermediary business in western countries has improved rapidly, which can be seen from the following: Expansion of the business scales, increase in income, abundant products, and advanced services tools. On the contrary, the intermediary business of Chinese commercial banks is much less developed: low business sca... |
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