A Study On Coordinated Supervision System Of China Financial Holding Companies

Due to the characteristic of cross-industry operation, financial holding companies are bringing big challenges to the traditional financial regulatory system. The global financial crisis in2008exposed the failure of supervision over systemically important institutions. After that, many countries have carried out the financial reform to prevent the unique risks of financial holding companies by constructing a prudent regulatory framework. With the development of the financial holding companies in China, there are several contradictions between the separate regulatory system and congregate business model such as regulatory gaps and regulatory duplication. Therefore, a study on the coordinated regulatory framework for financial holding companies is crucial to improve the overall efficiency of China’s financial regulation and to maintain the stability of financial market.Based on the definitions of financial holding companies and the theory of coordination game, this paper introduces the recent international financial reform in Europe and America in order to learn some successful experiences for the regulation over China’s financial holding companies. Based on the framework of coordination games, the paper studies the equilibrium choice of the regulatory agencies in the coordination of financial holding companies in China. After discussing the regulatory problems in China’s financial holding companies regulation, the assay analyzes the cause that leads to the regulation conflicts such as regulation blank and double-regulations. Then the assay comes up with a coordination framework of supervision over financial holding companies in China from two aspects, which are carrying out the financial regulation reform in the long term and improving the coordination mechanisms in the short term. Finally, this assay proposes several suggestions such as legal system construction, prudential supervision reform and the financial database development to improve the coordination supervision system of China’s financial holding companies.