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" Reforming the Chinese foreign banking law in the context of international supervisory standard convergence. "
Zhou, Zhongfei.
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Latin Dissertation
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| Record Number
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1094316
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TLets326166
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| Main Entry
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Zhou, Zhongfei.
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| Title & Author
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Reforming the Chinese foreign banking law in the context of international supervisory standard convergence.\ Zhou, Zhongfei.
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| College
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Queen Mary, University of London
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| Date
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2000
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| student score
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2000
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| Degree
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Ph.D.
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| Abstract
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This doctoral dissertation deals generally with the reform of the Chinese(Mainland) foreign banking law in the context of the international convergence ofsupervisory standards. The starting premise is that the current foreign banking laws areout of line with international supervisory standards and practices in various fundamentalrespects. Moreover, the Chinese legislators and bank supervisors lack a meaningfulappreciation and practical cultivation of commonly accepted supervisory values. Theserealities have underscored the importance of overhauling the foreign banking laws.The overarching thesis of this dissertation is that for China to develop a viableand modern banking system, it will need to develop and to implant a suitable legalinfrastructure consistent with emerging international supervisory standards and withWTO requirements and aspirations for financial sector liberalization. On this vein, Ipropose a set of reforms that would create a legal environment for competitive equalitybetween foreign banks, while at the same time protecting the "safety and soundness" ofthe Chinese banking system. I start by looking at the entry of foreign banks into theChinese market. My major proposal, in this respect, is that the Chinese foreign bankinglaw should clearly specify mandatory and discretionary licensing criteria. Since thelicensing of a foreign bank is a process of mutual cooperation between Chinese andforeign supervisors, I recommend that the foreign banking law should incorporate intothe licensing process the negotiation of a supervisory agreement between Chinese andforeign supervisors.I then examine the on-going regulation of foreign banks. In this respect, Ipropose that foreign banks should have autonomy to determine the adequacy of capital,liquidity and provisioning, although some quantitative prescriptions are still necessary.I suggest further that the foreign banking law should introduce risk-focused supervision.I also propose that bank supervisors should play an important role in ensuring thatforeign banks establish sound bank management and public disclosure.Finally, I consider foreign bank crisis management. I propose that the Chineseforeign banking law should establish a joint responsibility of China and foreigncountries on "lending of last resort" functions. Foreign banks should be required toparticipate in China's or their own countries' deposit insurance schemes. I alsoadvocate a rule-based approach to foreign bank failure resolution in order to reducetraditional strong political pressure on the Chinese supervisors when they deal withbank failures.In sum, this dissertation conducts a critical examination of the current Chineseforeign banking laws vis-a-vis an analysis of compatibility with international standardsand practices. The end result of this research is a number of consideredrecommendations for legal reform that I think should improve significantly the CUlJ'entChinese foreign banking laws.
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| Subject
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Regulation; Basle Committee
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Queen Mary, University of London
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