Universal banking has become trends and tides in the world since Japan and U.S.A transformed their financial management system in 1990s. However, the two countries mentioned above has gone differently: the financial institutes of U.S.A improved their competitiveness and had a good foreground while their Japanese counterpart is not so good. This paper starts with the comparative analysis of the background and process and actuality of the reformation in the financial institute of the two countries, compares the success and failure of the reformation of U.S.A and Japan, combines the analysis of the actuality of the financial institute in China, and concludes that in future China, universal banking is necessary and we should pay special attention to the time and course of it.
This paper is divided into five parts.
The first part: Relevant theories of financial management system and financial risk. This part mainly introduces the concepts of business separation and universal banking, compares with relevant terms on financial management system in “Glass-Steagall Act” and “Financial Modernization Act”, and analyzes the advantages and drawbacks of the two systems. The author thinks that, in term of angle that the financial management system is designed, no one can totally united efficiency and stability of financial management, there is a large amount of successful and failed precedent in the two kinds of financial institutions, there is not any kind of system that occupy absolute advantage: Universal banking leans to efficiency, while Business separation leans to stability. If the stability problem of universal banking can be solved, universal banking will be superior to business separation. I also review the concept and types of financial risk, in order to carry on comparative analysis to the financial risk of U.S.A and Japan.
The second part: Moving towards universal banking - the change of U.S.A.'s financial management system. First I introduce the background that U.S.A.'s financial management system has been reformed since 1990s, I think American economic growth appeared new characteristic of “three high, three low, three growths” in 1990s. These characteristics formed the external condition of the reformation of the financial management system; The change of the management environment that U.S.A.'s financial institutions faced and new tendency appearing, namely the competition of the non-banking financial institution and bank merging tides, extensive appliance of Hi-Tech in finance field and continuous developing financial innovation propose the inherent demand of transformation. Then this paper reviews the transition of the relevant legal security systems of this change of U.S.A., comparing with "Glass-Stegall law" and "Financial Service Modernization Act" in which U.S.A made the provision on business separation and universal banking, and studies the changes of the type of operation of U.S.A. financial enterprise, management theory finally, proves that the change of U.S.A.'s financial management system is successful.
The third part: "The Big Bang"-the change of Japan's financial management system. On the basis of initial analysis of the drawbacks to Japan's financial circles, I explain the whole story and result and consequence of Japanese "Big Bang". I think that, though the Japan financial system set up after World War II made important contribution to Japanese economy in Japan economy rebuilding period and economy high –speed growth period, after entering into 1980s, Japan finance circles can not meet the need of the requisition of the world and Japan economic situation change day by day. Especially in the 1990s, with the evaporation of Japan's bubble economy, Japan's financial circles had prominent drawbacks, for instance, relational banking system, the huge bad creditor's rights of financial institution and financial scandal of coming out one after another, etc. In order to solve Japanese banking serious bad creditor's rights problem and make a " reform bleeding " to the Japan financial circles for a long time of the serious illness too, Japanese "Big Bang" "unveils" in 1996. Even to this day, by viewing the result and consequence of change, this reformation was far from achieving the anticipated purpose, the huge figure of bad creditor's rights of Japan's financial circles still remains high, financial enterprises go bankrupt one after another, the crisis happen frequently. Japan’s "The Big Bang" is an unsuccessful change.
The fourth part: Comparative analysis on financial management system reformation of U.S.A and Japan. The paper makes comparative analysis to financial management systems of U.S.A and Japan from three respects. In implementing the reason of universal banking, because of the development of financial liberalization, regarding of fierce market competition as inherent motive force, in order to meet the need of new change of the management environment, U.S.A.'s financial circles has moved towards universal banking; and in order to solve banking's serious bad creditor's rights problem, Japanese government implement initial purpose of "The Big Bang" base on the premise that financial circles is managed badly. In the comparative respects of the financial circles risk of U.S.A and Japan, Bank of America passed effective risk management tactics, lowered risk in the possible condition, and guaranteed the steady growth of the bank profit; While because their Japanese counterpart’s assets expanded excessively and rose the problems of insufficient rate of bank capital and the proportion of non-performing assets is on the high side in the Japanese banking, financial risks were strengthened in Japanese bank management. On the experience and lessons got in the reformation of financial management systems of U.S.A and Japan, I think, there are close relations between the result of reformation and economic system and one's own operation conditions of financial circles, namely a country can make good result from the reformation when the economic system is operated well, financial circles is managed benignly, may get half the result with twice the effort on the contrary.
The fifth part: Enlightenment from the financial management systems reformation of America and Japan to our country. After reviewing the historical reason and realistic consideration of our country's financial management system-business separation, combining with the experience and lesson of above-mentioned financial management system reformation of U.S.A and Japan, it is an inevitable choice of the financial circles of our country that the financial management system of our country will implement universal banking in the future, but transition to it must seize the opportunity and process, can't blind the changes pursuing, follow in order and advance step by step. The author propose finally, the question that the financial circles of our country needs to pay attention to during the future management system reformation, namely accelerate the reform of state-run commercial bank, develop Hi-Tech, accelerate establishing the system of perfecting the financial laws and regulations and perfecting financial supervisory system, etc.