Legal Study On Foreign Banks' Limited License

With the establishment of the Shanghai Free Trade Zone(FTZ)and further expansion of the area,foreign banks enter the area actively,and catch up with Chinese banks in the number of business outlets and the size of the business,but the entering of a lot of foreign capital will increase Banking Systemic Risk,enlarge regulatory authorities' pressure,and conduct international financial risks.China's current license issuance system of the bank access is relatively oneness and general,it didn't subdivide the bank level and the scope of operations,it caused the serious competition in the homogenization of banking business,and the financial supply and demand is not match,therefor,the banking license system needs to be reformed urgently.The State Council and the China Banking Regulatory Commission(CBRC)shall support the establishment of a limited license bank when conditions are ripe,but based on the principle of prudent supervision and risk prevention,only five newly established private banks in practice shall be subject to the relatively limited license issued by the CBRC.However,the developed financial markets,such as Hong Kong China and Singapore,have many years of practice experience in foreign banks multi-level license management,and achieved good results in financial reform and risk prevention;In addition,Hong Kong China and Singapore and the Chinese mainland are all belong to Asia,and there are similarities in economic and cultural among them.For this reason,this thesis chose Hong Kong China and Singapore as a reference model,the author think that the construction of FTZ should be legislation in advance,and recommend that the foreign banks,which in the FTZ,will be managed by classified license system,establish a relatively independent regulatory agencies,in order to expand the opening up of the banking industry,but also to prevent the financial risk.