Bank regulation and supervision of China

3. The personal suggestion to the problems.

Barth et indicated that “Countries everywhere are therefore encouraged to do everything possible not to impede the development of financial markets, including the banking system, which is a particularly important component.” That is to say if the banking system or banking regulation and supervision exists some serious problem, it’s necessary to find the ways to get out of the problem.

In the last post, I did the research about the problems about Chinese regulation and supervision. And at this blog, I will focus on the solution of the banking regulation and supervision.

Laws and regulations for regulation system should be completely.

The popular suggestion which comes from most experts is to modify and perfect the existing laws, rules, provisions. The outdated and useless rules should be prohibited. And for the laws shortage and mutually contradiction, it should be revised and improve immediately. 

The bank regulation and supervision should be sustaining.

Improving the efficient of recurrent inspection and random inspection should be a good way. If the supervision department could make a specific plan before they carry out the regulation behavior, this would be more convenient to regulate. Strengthen the bank regulation and supervision persistently is not only the best method for banking system, but also the desirability for the stable financial market.

The personal quality of regulator need to be improved

The ideal solution is to establish a professional, international supervision team. The regulator should be the professional staff, so the restrict quality examination is absolutely essential. Also the regulator should be trained at a specialist agency.

The internal management of Bank should be improved.

The internal banking management and operation is an important part of banking system, otherwise, if the management of this part declines, which will affect the whole financial system.

In order to improve the internal banking system, the first stage should be focused on building a scientific and strict internal and external monitoring system; meanwhile, the supervision department should take the combination of the recurrent inspection and random inspection for the bank. There is another solution, which are the employees should have the induction training. The induction training can improve the personal self-discipline, and it can perfect the internal banking system well.