On Legal Problems Of China's Small And Medium-sized Financial Institutions Supervision

Against the background of today's international financial globalization, China's admission to the WTO has brought about unprecedented impacts and crash to the financial industry. Financial industry is a high-risk industry; there is an inherent instability, vulnerability and volatility in the financial system. In order to ensure the normal operation of the financial system and guard against financial risks, it is necessary to conduct\embark financial supervision over the financial sector. In the recent 20 years, the swiftness in speed and influence showed in the development of our small financial organ are conspicuous. The small financial organs have already become vigorous new forces in our country's financial industry system, and have become the indispensable component parts in the banking industry and even the national economical development. Presently, our country financial organ---especially the middle and the small financial organs have many problems: the unclear property right, the insufficient capital, the inaccurate market localization and the harsh external environment. The main problem in capital is that the overall capital level is not high, and the capital supplement is sluggish in the fast expansion of property. The fixed capital ratio is excessively high, and the massive capitals are occupied in the fixed asset that has no opportunity of changing into cash, both resulted in the insufficient floating capital. After joining in W T O five years, and together with the increasing threatening factors towards our small financial organs operation security, our country has initially formed multi-leveled and multi- typed financial organ system, the China Banking Regulatory Commission should take prompt measures to establish the perfect supervising system for the middle and small financial organs, from the standpoint of protecting the depositors' benefit and maintaining the security and stability of the middle and small financial organs. Therefore, it's of great theoretical significance as well as practical one in analyzing the current situation of the middle and small financial organs and furthermore researching the supervising problems.This paper is divided into three parts. The first part analyses the financial supervision and the middle and small financial organs generally. It mainly explainsthe connotation of financial supervision, the current situation and characteristics of the middle and small financial organs, the distinction when compared with large banks and moreover the necessity of supervision on the smaller ones. The purpose of financial supervision is to guard against the financial risks, and guarantee the financial security. Small and medium-sized financial institutions as integral component part of our modern financial system, their operational risks would inevitably have an impact on the entire financial system, and disturb financial order if without proper supervision. It has already become one of the urgent tasks in maintaining the sound operating of small and medium-sized financial institutions in the whole financial industry to establish perfect financial supervision system and to strengthen the supervision legally. The second part focuses on the overseas supervision and model. It introduced a number of principles and cases on the supervision certain organizations, countries and regions carried out, summed up some useful experiences toward China's small and medium-sized financial institutions supervision. The third part presents the measures of perfecting supervision on our small and medium-sized financial institutions. In order to perfect the supervision we should embark from the Chinese, give full research in the current national condition, model the successful experience and legal system from other countries, according to the international convention and criterion, and according to the "survival of the fittest" law of the marketing economy, effectively supervise the middle and small financial institutions legally and maintain their secure and orderly operation. In my view, we should re-establish supervision idea and priority and create a variety of monitoring system for building a sound financial supervision and legal system; establish the capital supplementary system and deposit insurance system, and improve the market withdrawal mechanism and the Information Notice system of the small and medium-sized financial institutions, strengthen the coordination of the financial regulatory agencies and international cooperation.