International Commercial Bank Regulatory Environment and System

Author: Jiang Jianqing
Publisher:
Publish Date: 2006-02-01
Features: Currently, the proportion of foreign branches, assets, and personnel in state-owned commercial banks still falls short of the standards of truly multinational banks. As state-owned commercial banks increasingly expand overseas, there is often a misconception: foreign financial regulations are mature and well-structured, and state-owned banks can operate with peace of mind in cross-border business. However, based on the regulatory practices of international banks mentioned above, an effective banking regulatory system establishes three lines of defense to prevent and resolve financial risks: a sound corporate governance structure and internal control system serve as the first line of defense; market discipline mechanisms, public supervision, and oversight by professional institutions form the second line of defense; and government regulation is the last line of defense. The role of government regulation is merely to fully mobilize the risk management initiative of bank enterprises, leverage the incentive and constraint effects of market discipline in risk prevention, and organize effective rescue measures when disasters ultimately occur, thereby limiting losses to the lowest extent possible. This book examines the banking regulatory systems in the countries where the branches of the Industrial and Commercial Bank of China operate from a specific perspective, recognizing that government regulation is merely a lifebuoy in times of crisis, while the sound corporate governance structure and internal control system of state-owned commercial banks are the most precious core firewalls. The ongoing stock reform and listing efforts will significantly advance the improvement of property rights systems and corporate governance structures in state-owned commercial banks, contributing to the overall development of a sound modern financial enterprise system. Therefore, this book can serve as a reference tool for domestic financial regulatory institutions, provide insights for domestic peers during their "going global" initiatives, and is also suitable for financial students aspiring to research foreign banks. The book comprehensively elaborates on the banking regulatory environment and systems in the Asia-Pacific region, the composition of the Hong Kong financial system, and an overview of the Korean financial system.