Research On Prudential Supervision System Construction Of China Banking

Financial crisis of2007changed the world finance radically. After it, the western countries introspected the financial crisis deeply, banking regulators also reformed the regulatory mechanism comprehensively. The concepts and ways of banking regulation got expansion, the macro-prudential supervision as an effective complement of the micro-prudential supervision, was raised to a new height, and became one part of the prudential supervision system. As to China’s situation, under stringent banking regulatory policies, affected by the level of development, China’s banking was limited to the financial derivatives market, so that great loss was avoided in the crisis. This also shows that owing to the relatively backward and closed banking supervision, China’s commercial banks lag behind on participation of international financial services and the global economy, and can’t deal well with the impact of financial innovation and comprehensive operation. Meanwhile, the crisis exposed that the regulatory gaps caused by dispersed regulation become birthplace of risks. China’s regulatory system can’t adapt fully to the current status of China’s financial industry operation, and will face more challenges in the future as the improvement of financial openness and innovation.This paper carries out research on international banking supervision system improvement and reconstruction after the financial crisis, explains the micro-prudential and macro-prudential concepts and measures systematically, compares changes of its core content combining with features of western developed economies regulatory policy reform. At the same time, from the micro and macro prudential perspective, this paper studies our current banking supervision systematically, combining with impact,causes and roots of the sub-prime crisis. It focuses on China’s current banking supervision defects, and proposes that banking supervision should be combination of macro-prudential and micro-prudential like "walking on two legs". This paper argues that China should clarify the boundary of responsibility of PBC, CBRC, CSRC and CIRC and emphasize on solving mixed operation risks caused by cross-regulation and multipoint supervision risks caused by collective supervision.This paper is divided into six chapters:Chapter1introduction illustrates the root of the crisis and the challenges to the banking supervision, explains the framework of this study and main points; Chapter2is theoretical analysis of prudential supervision; Chapter3mainly explains the improvement of idea and way in prudential supervision after the crisis; Chapter4analyses current banking supervision systematically, illustrates China’s banking regulatory system defects and international challenges;On this basis, chapter5makes a comprehensive analysis of the methods to build the post-crisis prudential regulatory framework. Chapter6is the conclusion.