s, in case commercial banks continue to invest in capital market without any limit. By this way, risks are limited in certain industry without expansion into other industry, thus reducing systematic risks.Therefore, in terms of financial supervision, establishment of Fire Wall is the essential method to prevent risks from universal operation.
Based on the current situation in banking industry in China which can only support financial holding company as analyzed in previous chapters, the two main actions should be taken are building Fire Wall and supervision of capital. Five measures should be taken to govern and supervise the universal banking development in China.
1. Building strict Fire Wall
2. Limitations of connected transactions
3. Control of the concentration of risks
4. Requirements for qualifications of senior managers
5. Information closure of financial holding company
Overall, the dissertation states that the universal choice is a certain developing direction for banking industry in China. Compared with Germany, it is convinced that the only possible model for universal banking system in China is financial holding company. Whether the implementation of universal banking system can be achieved in China mainly depend on the regulations of government. Moreover, financial supervision has to be improved to ensure that the process of universal banking development in China can be successful.
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