China Banking Regulatory System

Banking business is the cord of modern economy and plays an important role in national financial system. Its healthy operation is a key factor to finance running well. The supervision from central bank is also a key factor to safety operation of banking business. The banks don't have strong awareness of risk control, and have many bad loans, and run under big risk because China banking system are heavily affected by planned economic system for a long time.Since China has jointed the WTO and its finance opening to world is accelerated, the banking business of Chinese bank will face heavy impact from foreign banks. Under this situation, how to control banking risk and how to strengthen the supervision from central bank become the focus issue. This paper starts with the theory of financial supervision and analyzes in detail the framework development of financial supervision. On the basis of this study, combining the supervision experience from the banks in developed western country, the suggestions about how to perfect the supervision system are proposed as follows.The first part of this paper introduces in general the theoretical foundation of financial supervision. It explains the whole development of financial supervision through the evolutions and practice of financial supervisionIn the second part, it reviews the system development of the bank supervision in China. Then, on the basis of this, it evaluates briefly the development of the bank supervisory system in China, and analyzes the experience gained in the past and problems existed.The third part Recommends mainly supervising mode of the developed national bank, and summarizes its experience in supervising at the bank.The fourth part, combining the supervising experience from developed national bank, proposes the suggestions on improving the framework of bank supervision from different angles, such as law, government supervision, society supervision, the trades supervision and internal automatic control.