Research On Legal Issues Concerning Shareholding Structure Improvement Of City Commercial Banks In China

Since the1990s, with the continuous improvement of the opening degree of China’s financial markets, local commercial banks quickly developed whose capital and scale have been greatly improved. But the subprime mortgage crisis triggered a financial tsunami turned the focus on the supervision of commercial banks again. In the post-financial crisis era, the sound development of city commercial banks must be built on the premise of preventing and resolving various risks. Many potential problems had exposed which made the development-oriented theories and initiatives in the past encounter many challenges. Under the special financial environment of the economic transition circumstance, how to effectively perform legal supervision to optimize the shareholding structure of the city commercial banks that could balance powers and coordinate internal control mechanisms are worth exploring.This article addresses the issues mentioned above and is divided into four parts:The first part of the Introduction section, raised the questions and made a general introduction on the basis of the literature review, research ideas, structure of the system, research methods, topics of significance and value. This part briefed three main issues of corporate governance structure, regulations of the internal control of commercial banks and legal research on shareholding structure of commercial banks. This article is sort of innovative since there are not so many literatures on the shareholding structure of the city commercial banks. Meanwhile, due to the limitations of existing data analysis and practice survey does not fully cover all city commercial banks’ shareholding structure in different environment at different time points; the article did not conduct the analysis of specific differences in the microscopic case. In addition, because of the limitations of the author’s own theoretical foundation, it also makes a lot of detail problems worth exploring with insufficient in-depth analysis. The second part--the existing legal framework for the status of the shareholding structure of the city commercial banks adopted the empirical studies, comparative analysis and other methods intended to clarify the history and development of city commercial banks and legal status and understand its different from other commercial banks operating mechanism and social background; In the end discuss the corporate governance status and the problems of three major types of shareholders--government, foreign investor and private company through survey and analysis of relevant regulations and laws.The third part--legal analysis on the city commercial banks shareholding structure raised three main issues based on the data analysis of part two:the high proportion of the controlling shareholder and the lack of effective controls and balances between large shareholders; the risk of private capital participation; insufficient protection to the interests of stakeholders. In addition, performed analysis of the causes and the existing internal control regulations of the specification problem, to discuss the effectiveness of these norms in practice on a empirical way.The fourth part--legal completion of city commercial banks shareholding structure attempted to improve the existing legal framework and internal control systems of city commercial banks to reduce the regulatory risk based on the analysis above. Raised two proposals:to improve the internal control of foreign investment, private capital and improve the regulatory system of internal governance of city commercial banks, in addition, explored the improvement of and feasibility of these measures in practical conditions and achievements and new issues.