Foreign Banks Credit Mechanism And Its Spillover Effect

In1979Japan Tokyo bank set up the representative office in Beijing, and opened after the founding of the foreign capital bank in China set up financial institutions of its kind. Since China’s accession to the WTO since its WTO accession related serious commitment, and pushed forward the opening to the banking industry. On dec.11,2006, with the law of the People’s Republic of foreign capital bank of the regulations on the administration of formal, our country over five years transition, comprehensive its WTO accession to the commitment of the banking industry when open. Foreign capital bank in China market get all-round development, in addition to realize clients and business region continues to expand outside, its business institutions quantity, business types, business scale but also won the rapid development, and by the end of2010to the Chinese foreign bank’s business institutions amounted to441, foreign capital bank’s full access to make our country’s financial market undergoing profound changes.In2008the happening of the financial crisis on global each country’s economy has deep influence. In the process of the crisis have to join Chinese Banks have unshirkable responsibility. Foreign Banks use high leverage and asset securitization, and other financial innovation means that a doubled risk, Goldman group as one of the world’s biggest investment Banks, only use of currency swaps and credit default swap contracts two financial tools he directed the Greek crisis. In fact, the foreign bank supply of financial innovation tools is a high-risk product, the strength of the financial institutions in order to its own interests, through these tools on the surface cover up debt problems the result is buried the more hidden trouble.Entery of the foreign Banks to the economic development of China both opportunities and challenges, we also put forward accordingly to answer a series of questions to be reality: from foreign Banks to provide credit support for our country the micro analysis, foreign capital bank in China’s economy have how old support? Compared with the Chinese bank business, have the advantage of foreign Banks how? In the country’s economic development process, the foreign bank this force is necessary? Study of these problems, this paper discusses strategies for bank development strategy and the state’s financial policy formulation provides basis for decision-making, has important realistic meaning and theoretical value. Based on the analysis of the bank operation mechanism, from a microscopic perspectives analysis above problems.The article by seven components:the first chapter of this paper expounds the background and study method, outlining a research at home and abroad are introduced, and gives the idea and the overall analysis framework. The second chapter reviews the domestic and foreign scholars on foreign capital bank’s research. In the third chapter reviews the development of foreign Banks in China three historical stages, and analyzes on the present situation of foreign Banks. The fourth chapter born under the framework of monetary theory, a detailed analysis of the foreign capital bank provide credit support process, this process by layer reasoning questions. Combined with the actual conditions of our country, from theory and empirical two aspects to foreign Banks in China’s banking industry and the impact of the economic development. The aspect of theory, first analysis of the foreign Banks offer foreign currency loan RMB issue to the influence of foreign exchange reserves, and then explores the foreign capital bank in China’s banking industry to influence. And through empirical analysis method, foreign Banks in China’s banking industry to verify the efficiency of the effect. The five chapters in front on the basis of analysis, we conclude view and puts forward some countermeasures. Through theoretical analysis and empirical test, think of foreign Banks and credit supply in essence and the Chinese Banks and no two to send, and foreign currency loan is behaved for China’s foreign exchange reserves and foreign currency loan specified amount to increase, and matching the passive issue. As a sovereign state, we have the ability to provide any domestic enterprise required financial support, our country the district government deliberately introducing the foreign capital bank may disrupt the normal financial order, affect the financial stability, the domestic Banks and enterprise between good credit relations should be the focus of attention all over town hall, and promote the Chinese bank credit ability is its invincible basic. The sixth chapter summarizes the point of this article, have pointed out the direction of future research.