The Study On The Supervision Legal Problems Of Private-owned Banks

As an important part of the reform of financial system in China, private-ownedbanks play an increasingly vital role. In2013, CBRC (China Banking RegulatoryCommission) officially permitted the entry of private capital into banking industry.Since then, private-owned banks rapidly developed, tapping energy into the marketeconomy in China. To find their precise location is the foundation of research. Theprivate-owned banks concerned in this thesis are different from other state-ownedcommercial banks. Since they are invested, operated, owned, governed and enjoyed bypeople, there exist differences between these banks and general private-owned banks.Compared with government-owned banks, private-owned banks have an advantage inproperty right structure, transaction cost, business pattern, market efficiency, etc. Theestablishment of private-owned banks constitutes an important supplement to thestate-owned financial system, playing an indispensible role in perfecting the financialsystem. Therefore, the development of private-owned banks is the practical need ofChinese economic development. During the developing process, they will not only beexposed to the risks shared with other banks, but also generate some unique risksbecause of their own specific features, which will restrict their development. In order toavoid these risks, the reasons for them should be analyzed and the risks should also besupervised.At the current stage, the supervisory goal of private-owned banks generallyestablishes safety as the core, and the supervision should strictly conform to the fiveprinciples which were set as the pilot supervisory principles. During the supervision, thesupervisory goal and principles should be followed and the banks need to be differentlysupervised as to make private-owned banks provide better services for communities andmiddle, small and micro-sized enterprises, and avoid risks as well. Meanwhile,private-owned banks should formulate short-term, medium-term and long-termsupervisory objects in order to strike a balance between safety orientation and safety&efficiency orientation, and stabilize the economic development. Connected transactionshould be strictly controlled and information disclosure system should be completed tomake sure banks could operate well. In addition, market exit system and depositinsurance system according with the distinctive features of private-owned banks need to be formulated to decrease risks and reduce the damage of risks.At present, China has approved and established five private-owned banks as pilotsand executes “limited license” system. Under the circumstances, private-owned banksare developing steadily. Its establishment plays an essential role in enriching thefinancial market and adjusting the financial order. Therefore, rational and completesupervisory system should be established as soon as possible to guarantee thestabilization of the financial market and the development of private-owned banks.