Revolution and Challenges in Financial Mixed Operation in China

Ever since a long time ago, the system of divided operation has been always been existing in the financial industry in China. Since the reform and opening-up in China, the financial industry has switched from mixed operation to divided operation and then back to mixed operation. The original idea of divided operation is to construct a financial firewall between commercial banks and securities companies to avoid cross-industry transmission of risks so as to diminish systematic risks. However, generally speaking, mixed operation is favorable for improvement of service efficiency of assets and reduction of risks. Thus, we should further perfect financial laws and regulations system, improve financial regulation technology and supervision system, speed up reform pace of financial industry and boost the core competitiveness of financial institutions.