Cooperation And Development Of Commercial Banks And Trust Companies In China

According to our current financial sub-sector regulatory pattern, trust company, as the only kind of financial institutions which can run business across the money market, capital market and industry market investment, has a unique systematic advantage. Meanwhile, due to intense competition and frequently emerged financial disintermediation phenomenon, the banks came to realize that, to promote innovation and development, they can build up cooperation with the trust companies by make use of their systematic advantages. On the other hand, the fledgling trust companies, due to lack of strength, customers and resources, also began to seek cooperation with the banks which had an absolute advantage in these areas. Both of them strived to achieve a win-win development by making use of their respective advantages.Since the beginning of bank-trust cooperation, this new business grew faster, creating more financial products and expanding cooperation scale. However, more and more problems were exposed in the process. The most typical was the that some banks carried out bank-trust cooperation by providing loans for enterprises through trust companies, which helped them to circumvent various regulations and restrictions. As the size of the bank-trust business increased, these potential risks hidden behind the regulatory supervision became self-evident.From this background, this article analysis the problems existing in the market of bank-trust cooperation, and tried to propose some measures to change the business mode, and propel the market in a sustainable direction.