| In recent years, with the generation of financial holding company, its unique risks are being exposed. Due to its organizational structure and complex control relationship of economic relevance, asymmetric information and the radiation of confidence, the internal risk of one company easily spreads to associated companies through related transactions, cash and information flows. The lack of effective external supervision may make public lose their confidence in financial holding company, even causing systematic risks and damages to real economy. Therefore to guard against the risk transmission and diffusion has become a key problem to be solved in the development of financial holding company as well as a difficult issue in the research on risk prevention. An effective way to prevent such risk transmissions relies on both internal governance and external regulation based on foreign experiences and the domestic situation. Along this line of thought, this paper is divided into four parts:The first part starts from analyzing reasons that cause the risk transmission and concludes that risk transmission is caused by related transactions, internal resource sharing, regulatory defects and “herd behavior”. Based on this conclusion, the author summarizes a characteristic of risk transmission such as a domino effect with concealment in spreading, suddenness, reputation relevance and controllability.The second part analyzes the issues in legal mechanism of preventing risk transmission in financial holding company. The author points out that there are certain defects in internal governance structure, regulation of related transactions as well as the existing regulatory mode. The author notes a need to have a breakthrough in order to construct a risk transfer mechanism in future.The third part introduces experiences of some foreign countries in preventing risk transmission of financial holding company, which not only describes the key measures to prevent the risks and typical patterns in external risk control, but also evaluates the advantages and problems of various regulate models. Based on this, the author sums up what one could benefit from these foreign experiences in the establishment and optimization of China’s legal regime in the risk prevention of financial holding company.The fourth part puts forward some effective legal measures targeting at problems in China’s efforts to prevent risk transmission for financial holding company, including the strengthening of internal governance mechanism and improving of external regulation. The former concerns the improvement of corporate governance structure, establishment of a risk warning mechanism, and strengthening of both incentives and restraints. The latter includes the improvement of firewall system, information disclosure, regulatory model and approach.The fifth part is a summary. The author concludes that the establishment and collaboration of all mechanisms relies on the perfecting of relevant laws and regulations. |
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