The blank of financial legislation requires us to design a perfect legal system of financial holding companies and standardize their development in view of the existing problems and drawing lessons from international experience. The following are the rational analysis papers of financial holding companies that I collected for you. Welcome to read for your reference.
This paper analyzes the advantages and risks of financial holding companies, and then puts forward effective and feasible measures to promote their steady development, which is undoubtedly theoretical progress and provides strong theoretical support for the development of practice. With the rise of financial globalization, the competition in the financial field is becoming increasingly international, and mixed operation has become the development trend of the global financial industry. In China, financial holding companies are on the rise, which is an innovation in the practice of the current legal system of separate operation and an effective institutional transition of the financial industry from separate operation to mixed operation.
Keywords: separate operation; Mixed operation; Risks and advantages; system design
The blank of financial legislation requires us to design a perfect legal system of financial holding companies and standardize their development in view of the existing problems and drawing lessons from international experience. Since the 1990s, under the trend of financial omnipotence, China's financial industry has experienced the mode and legal system of separate operation to prevent financial risks, and now it has innovatively established financial holding companies or quasi-financial holding companies such as CITIC Group, China Everbright Group and state-owned commercial banks, which is obviously a new exploration in the financial field.
First, the rational analysis of the development of China financial holding company.
According to the Supervision Principles of Financial Holding Companies jointly issued by the Basel Committee on Banking Supervision, the International Securities Federation and the International Association of Insurance Supervisors in February 1999, a financial holding company is defined as a financial group company that provides services on a large scale in at least two different financial industries under the same control. As a new type of mixed operation organization, financial holding company is actually a financial enterprise created to adapt to the expansion of financial business scope under a specific regulatory environment and management culture.
As a new thing in China, financial holding companies have a rational soil for their survival and development.
(1) International trends.
The change of financial business model is a spiral dialectical development process. Looking back at the development of financial structure in the major developed countries in the world, they have basically experienced the evolution from initial mixed operation to strict separate operation and supervision, and then to medium-and long-term financial innovation and integration. Successful examples are the United States and Japan. Experience? Financial explosion? It ended the mode of separate operation and turned to the integration of financial holding companies, absorbed the advantages of separate operation and mixed operation, abandoned their defects and developed into a more compatible mode.
(2) its own mechanism.
Risk and efficiency are eternal contradictions in finance. China's financial legislation emphasizes maintaining the security and stability of the financial system, and implements strict separate management. With the fulfillment of WTO commitments and the influx of foreign financial institutions, we can better maintain financial order and security only on the basis of improving financial competitiveness and efficiency. As scholars say? The gradual establishment of the market position of industrial and commercial enterprises and financial enterprises and the constant pursuit of profits are the micro reasons for the emergence of financial holding companies? .
(3) Practical exploration.
At present, there are still many restrictive factors in the full implementation of mixed operation in China, such as the lack of centralization, which can not meet the requirements of diluting the boundaries of various financial fields under comprehensive mixed operation; The capital market, especially the securities market, has low transparency and weak ability to bear financial risks; The internal control mechanism of financial institutions is not perfect. What if it comes true? In one step? Mixed operation is easy to induce and accumulate financial risks. In practice, the four major state-owned banks have set up financial companies. In addition, Everbright and CITIC are also strong financial holding companies in China, and many joint-stock commercial banks have also taken financial holding companies as their future development direction.
Second, the advantages and risks of developing financial holding companies
The existence of financial holding companies has its reasonable advantages and inevitable risks, which is the duality of things, and the value of existence is the game result of its advantages and disadvantages.
(A) the development of financial holding companies operating advantages
1. Advantages of economies of scale: reduce costs by increasing the number of certain financial service products, such as expanding bank branches and business outlets to absorb more deposits; By increasing the types of financial service products, such as using the same bank outlet to sell different financial products and securities, insurance, funds and other financial services at the same time.
2. Advantages of financial innovation: The form of financial holding company makes the capital market and money market become an organic whole, funds can flow freely, and various businesses are not restricted or less restricted, so that various elements within the financial field can be recombined and new financial businesses can be derived, thus promoting financial innovation.
3. Advantages of risk diversification: The main characteristics of financial holding companies are: mixed operation of groups and separate operation. Financial holding companies allocate funds in a unified way through the group, disperse the systemic risks of a single business through diversified and integrated operations, and transfer risks by using a reasonable investment portfolio. Set up a unified risk supervision organization at the group level to improve the effectiveness of risk control of subsidiaries and reduce the cost of risk control.
4. Convenience advantage: This is mainly aimed at customers, namely? One-stop financial service is also called. Financial supermarket? That is, all kinds of financial goods and services are integrated on the same platform. When consumers enter a financial supermarket, they can conduct various financial transactions such as savings, credit, credit cards, insurance, funds and stocks at the same time.
(B) the operational risks of financial holding companies
1. Capital double counting
Capital is the source of life of financial institutions, a buffer against risks and the ultimate guarantee of creditors' interests. However, in order to maximize the efficiency of capital utilization, financial holding companies are prone to double-counting capital.
Usually: (1) The capital allocated by a group company to its subsidiaries is reflected on the balance sheets of the group company and its subsidiaries at the same time, resulting in double counting of capital; (2) Cross-shareholding and mutual investment among subsidiaries lead to multiple calculations of capital. Using the same capital to resist the risks of multiple companies is very unfavorable to protect creditors, which will eventually lead to the overall risk of the group.
2. Risk of internal related party transactions
The complexity of the internal structure of financial holding companies determines the cross-shareholding relationship and complex capital chain, making the related transactions between parent and subsidiary companies an important part of business strategy. Related party transactions are usually manifested in mutual transfer of funds and commodities, mutual guarantee and mutual transfer of profits to avoid taxes and avoid supervision.
The internal related transactions of financial holding companies virtually form the debt chain of each legal person in the holding company. In addition, related party transactions also increase the possibility of insider trading by subsidiaries. If insider trading happens, it will inevitably hinder the fair competition of market players and harm the interests of investors.
3. Risk spread risk
Financial holding company is a financial mixture involving many financial fields. Once the risk occurs, it will be transmitted to each other with the internal transactions of each company, detonating the risk of the whole group company. Risk communication can be subdivided into two aspects: risk communication and infection. Pass-through effect means that the crisis of individual members of financial holding company will be amplified through complicated tangible and intangible contact spillover and echo, which will affect other members and even the whole group and escalate into systemic risk.
The contagion effect means that even if the financial holding company only bears limited liability for the debts of its subsidiaries, but the firewall has been set up among the members of the group, the outside world will still suffer losses due to the crisis of one member, leading to the decline of the stable operation and credit ability of other members and even the whole group. The contagion effect stems from the concern of the outside world about the risk transmission effect of financial holding companies, which further intensifies the transmission effect. For example, for the sake of maintaining the overall reputation of the group, financial holding companies often allocate funds to help subsidiaries that are on the verge of bankruptcy, which in itself may become a channel for risk transmission.
4. Regulatory risks
The essence of financial holding company is to break through the clear boundaries of existing supervision, dilute the boundaries of financial companies and strengthen the information exchange between parent and subsidiary companies. However, at present, the separate supervision mode of China's financial supervision institutions mainly adopts diversified supervision: the People's Bank of China (CBRC), the China Securities Regulatory Commission and the China Insurance Regulatory Commission have three pillars. The supervision objectives, methods and emphases, as well as the standards and scope of supervision of these supervision institutions are different, which is not conducive to the coordinated action of supervision institutions and the formation of strictness? Firewall? , isolate the transmission of risks. However, the information asymmetry between the parent company and the subsidiary company weakens the supervision of the company, leading to? Regulatory vacuum? , promote the principal-agent problem, and then induce large-scale financial risks, leading to the turmoil of the financial environment.
Third, the legal design of financial holding companies.
(A) the type selection of financial holding companies
The types of financial holding companies can be divided into two types according to the motives and methods of holding: one is pure financial holding company, which means that the parent company generally does not engage in specialized financial business or retail business, but only wholly owns or absolutely holds subsidiaries such as commercial banks, insurance and securities. These affiliated institutions or subsidiaries have independent legal personality and independently carry out specialized financial business. Second, the operating financial holding company, that is, the parent company operates specialized financial businesses, such as banking, insurance, securities, asset management companies, etc., and participates in other financial businesses by setting up subsidiaries through capital contribution.
In western countries, financial holding companies are generally operating holding companies. In the United States, holding companies and financial subsidiaries are independent legal persons. Holding companies and subsidiaries are closely linked through asset ties and the principle of shareholding system, and various financial businesses are effectively established? Firewall? Different subsidiaries engage in different kinds of financial business.
In Germany, it is a financial holding company with universal banking model. Financial holding companies can not only engage in commercial banking business, but also engage in all-round financial services including securities, insurance and welfare. However, China is in the transition stage of market economy, and compared with the developed western market system, there are still many imperfections. Therefore, I think it is appropriate to implement a financial holding company at the initial stage of its establishment. Pure type? Holding company model.
The parent company has no unique professional field, but is the decision-making department of the company's business strategy. The parent company can concentrate on the strategic management of its subsidiaries and improve the efficiency of capital operation, internal integration and external merger and reorganization of the company. Subsidiary is the main body of business activities, which carries out the strategic intention of the parent company through their different business operations, and is the business center and profit center of the whole financial holding company.
At present, in the financial system mainly composed of commercial banks, insurance companies, securities companies and trust companies, the strength of commercial banks is the strongest, especially those national commercial banks, whose business outlets, assets and capital scale are unmatched by other non-bank financial institutions. The first commercial bank capable of acquiring other financial institutions or non-financial institutions.
And it can prevent conflicts of interest between financial holding companies and subsidiaries. It should be the main direction or realistic choice for the development of financial holding companies in China to build financial holding companies with commercial banks as the main body and finally form standardized financial holding companies.
(B) to speed up financial legislation
The existence of financial laws and regulations is the legal basis for the legal existence and development of financial holding companies. Although China has legally established the pattern of separate operation and supervision of banks, securities and insurance. For example, the Law on Commercial Banks clearly stipulates that commercial banks may not engage in trust investment and stock business in People's Republic of China (PRC), and may not invest in non-self-use real estate; Commercial banks are not allowed to invest in non-bank financial institutions and enterprises in People's Republic of China (PRC). Article 3 of the Securities Law clearly stipulates that the securities industry, banking industry and trust industry shall operate and manage separately. However, the current law does not explicitly prohibit the financial holding company model, which leaves room for the development of financial holding companies, but it also does not provide clear support. Therefore, under the current financial legal framework in China, it is necessary to integrate various financial laws and modify the relevant contents of joining financial holding companies to make them coordinated and complementary. The text should establish the legal status of financial holding companies, clarify the conditions and procedures for the establishment of financial holding companies, and the threshold for their establishment should be higher than that of ordinary companies; Clarify the business scope and operation mode of financial holding companies and realize a clear division of labor.
(C) the establishment of professional comprehensive regulatory agencies
According to the spirit of the Central Financial Work Conference in February 2002, the basic pattern of separate supervision will not change for some time. Moreover, the revised Insurance Law, Commercial Bank Law, Securities Law and Banking Supervision Law, which are being revised and formulated, have not broken the current regulatory pattern. Therefore, on the basis of the current separate supervision system, the reasonable supervision structure of financial holding companies is explored in order to be fixed in the form of legislation.
In practice, in 2000, the People's Bank of China, China Securities Regulatory Commission and China Insurance Regulatory Commission established a tripartite supervision joint meeting mechanism. The Memorandum of Financial Supervision Division and Cooperation adopted by the tripartite joint meeting of financial supervision held from September 6 to 8, 2003 stipulates that the relevant institutions and businesses of financial holding companies shall be supervised separately according to the nature of their businesses, in accordance with the principles of separate supervision, clear responsibilities, orderly cooperation, transparent rules and practical results. According to the nature of its main business, the group companies of financial holding companies are subordinate to the corresponding regulatory agencies for supervision. In this sense, the regulatory framework of China Financial Holding Company has been initially established.
However, due to the lack of specialized regulatory agencies to supervise financial holding companies, it may lead to inconsistent coordination among the regulatory parties, or all regulators will not be responsible for this, or compete for regulatory rights; The existing regulatory authorities are only familiar with the regulatory business of the industry, and it may be difficult to assume the responsibility of comprehensive supervision of financial holding companies; Because the group companies of financial holding companies are still supervised separately, it will inevitably form a blind spot for the supervision of financial holding companies. Therefore, it is necessary to establish a long-term professional comprehensive supervision institution, which is responsible for cross-industry supervision and decision-making, and the subsidiaries of financial holding companies in different financial business fields are professionally supervised by the original supervision institution.
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