Study On Nature Of China Banking Regulatory Commission And Validity Of Supervision

As the legal banking supervisor of our country, China Banking Regulatory Commission takes responsibilities of maintaining order and security of market. However, it is the "ministry-level institution directly under the State Council", and this status leads to many problems. The main problem is, according to the definition of public institution, it is non-profit social organization set up for the purpose of public welfare, and it usually exests in the cultural field, health area, sports area, etc. The CBRC is empowered to make rules, implement administrative licensing, impose administrative penalty and also inspect commercial banks. Obviously, the function of LBRC is different from that of public institutions. Its power of making rules is not lawful in legislation law and administrative law, although the banking regulatory law enacted by NPC Standing Committee has granted it. Thus, the regulatory rules it has already maked are challenged in its validity. However, regulatory authorities and commercial banks both regard these regulatory rules as administrative provisions, which are maked through procedures of initiating, drafting, deciding, publishing. In this situation, researches are done to analyse question about the legitimacy of its rules, arising from the inappropriate definition of CBRC. In addition, scholars and the State Council tries hard to solve this problem. Under the background of institutions reform by the State Council, redefinition of property of CBRC is necessary. According to the character of power, defining CBRC as administrative organ is necessary. Also, according to the classification of legal entity in our civil law, defining CBRC as administrative organ is legitimate. Then, the article goes on to the questions that national economic modulation mechanism theory contains in jurisprudence and legal system. Once defines the CBRC as administrative organ, series of regulatory documents it has formulated and promulgated gain legality in administrative law. Then, its documents can be divided into administrative regulation and administrative rule according to the making process, while the latter can even be divided into creative administrative rule, explanatory administrative rule and instructional administrative rule, based on the legal effect of different rules. After definition of the nature of documents, the article dicusses breach of the supervisoring purpose. The most important breach is that the regulatory documents of CBRC interfere in the market improperly and restrain competition among commercial banks. It is because the regulatory power connects too close with the macro-control power that the formulation of regulatory rules are subject to macroeconomic policy. To solve this problem, the CBRC should improve its independence on rulemaking. Its rules must be based on the banking market, and be made for the purpose of protecting the order of competition. Also, it should exercise of its supervisory power in a moderate manner.