中监为体、西监为用 or the Specifics of Chinese Bank Regulation
Violaine A. Cousin
June 29, 2011
The present paper aims to propose an explanation for the rationale behind the current banking regulatory arrangement in China. A now stable and relatively healthy banking system emerged largely unscathed from the financial crisis without relying much on recognised international best practices in bank supervision. China combines a strong regulatory hand together with a capital adequacy requirements stick, without much intervention of foreign or private institutions in the larger sense of the term. After an in-depth review of the Chinese framework we recognise that it is exactly this lip service to private monitoring mechanisms on top of restrictive regulators that allows for stability and growth - at least for now. China uses Chinese supervision as the core and western regulatory instruments as useful add-ons - a manner similar to the catch phrase used over a century ago to rejuvenate China.
Number of Pages in PDF File: 23
Keywords: banks, regulation, China
JEL Classification: G18, G21, G28working papers series
Date posted: June 29, 2011
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