Study On The Mixed Operation Mode Basing On Commercial Banks

After the1980s, especially in the1990s, the basic pattern of the global financial industry haschanged fundamentally. On one hand, the major developed countries such as the United States, Britain andso on relaxed the strict control of the financial institutions to continue the financial liberalization. Theyreform of the financial regulatory and supervisory mode. On the other hand, the growing trend of mutualpenetration between traditional financial institutions business become more and more quickly. Commercialbanks play an important role in the mixed operation, mixed operation become to be the leading mode.The model of the financial industry can be changed as the economic developed. Germany andother continental European countries have been taking mixed management in the world’s financialdevelopment. Most of the other countries such as United States and Britain are experiencing the threesteps "Mixed-Separate-Mixed ", this represents the development trend of the contemporary financialindustry.Separate and mixed operation mode have their pros and cons, it can not say that any one of themin the mode is better than the other one. One country selects the separate operation mode or the mixedoperation mode is not only involved in the financial management of an enterprise system. However, thecountry’s circumstances and historical conditions also can be involved. Our country implements theseparate operation mode. However, our commercial banks will meet the external power such as reducingthe risk, meet the diversification of customer needs, facing the financial globalization and updating theinformation technology. This will accelerate the bank’s involvement in mixed operation on a large scale, asa result, the mixed operation of commercial banks will become a general trend. Comparing these modeslongitudinally can clearly understand that they were produced in different financial system, having itsunique historical development background. Comparing these modes horizontally, it can be found that theyhave different decision-making rights, different prevention of interest conflicts and risks.It is important to analyze the mixed operation mode with subprime mortgage crisis, because somepeople blame it is the mixed operation mode caused the crisis. However, the mixed tendency is notdiminished, on the contrary, the tendency is further strengthened. The asset structure is diversified andbusiness scale is h vigorous vitality. When China’s commercial banks chose one mode to develop, it should absorb and learn from theadvanced experience. In this thesis, it selected Citigroup as an example. It found that mixed operation canenhance asset size and operation strength. The capacity and conditions for the development of any of theuniversal banking model, or a bank holding mode is not at the time. Both need high financial regulatorycapacity, better risk control ability and perfect capital market mechanism. These conditions in our countryare not available, so the financial holding company is a suitable model for our country commercial bank.Basing the mode of mixed operation is financial holding company, we should choose which kindof financial holding company in our country is better. There are three kinds of body of financial holdingcompany now, which are industrial companies, financial institutions and non-financial institutions. It is thestate-owned commercial bank in the financial institution is State-owned commercial bank is better suitable.Based on whether the headquarter take on the profitable business, the financial holding company can bedivided into pure and business type. Our state-owned commercial banks should choose the pure financialholding company.China’s commercial banks now run on mixed business mainly in three ways which are settingdepartment, holding subsidiaries, protocol other forms of cooperation. It is similarly like the primary stageof the Banking Holding Company model.Based on the analysis of the state-owned commercial bank’s data, we can found that the currentsystem of state-owned commercial banks in China is still at the primary stage, the profit ability from thesethree methods offer is limited. Although the similarity of our country’s state-owned commercial banks andthe initial stage of the Banking Holding Company model, our state-owned commercial banks in Chinashould take the mode of financial holding company model finally. It provided a dynamic path from theBanking Holding Company to the financial holding company as the main way and merger is the main way.In the process of transformation, we develop or revise laws and regulations gradually, meanwhile, improvethe financial laws and regulations system.