Financial Holding Company Risk Is Passed To Prevent Legal Problems

Since the financial innovation and integration, the problem of risk contagionwithin the financial holding company (thereinafter referred to as FHC) isthreatening the growth of financial conglomerate. This article focuses on the riskcontagion within the FHC and how to prevent FHC from getting more exposure tothe risk contagion through cases, economic study, historical study and comparativestudy. In the first part of the article, the definition of the FHC is confined to the pureFHC. Then the second part of this article identifies the sources of risk contagion andthe major channels to deal with the said problem. After that, the third part of thisarticle involves a comprehensive analysis on system of financial firewall,information disclosure and functional supervision. Meanwhile comprehensivevaluation of the foreign judicial practice and international routine are advanced.Finally, the last part of this article brings forward further considerations on the riskcontagion within Chinese FHC. Particularly, the featured characteristic of ChineseFHC risk and the status quo of the judicial practice are identified. Following that,certain suggestions to improve the relative systems are lodged.