Part One Overview of the Banking Industry in China 1
Ⅰ. The Role of the Banking Sector in China 1
Ⅱ. The Central Bank Reform 3
Ⅲ. Vigorous Development of the Commercial Banking Sector 4
Ⅳ. Increased Openness of the Banking Sector 5
Ⅴ. Strengthened Banking Supervision 6
Ⅵ. Priorities of the Further Banking Reform 7
Part Two Banking Supervision 9
Ⅰ. Importance and Objectives of Banking Supervision 9
1. Characteristics of Banks and Importance of Banking Supervision 9
2. Objectives of Banking Supervision 10
3. Preconditions for Effective Banking Supervision 11
Ⅱ. Licensing Process 12
1. Phases of the Process 12
2. Factors Evaluated by the Chartering Authorities 13
3. Basle Committee's Requirements on Bank Licensing 13
Ⅲ. Arrangements for Ongoing Banking Supervision 16
1. Risks in Banking 16
2. Development and Implementation of Key Prudential Rules and Requirements 18
3. Methods of Ongoing Banking Supervision 25
Ⅳ. Resolving Problem Bank Situations and Dealing with Failing Banks 35
1. Resolving Problem Bank Situations 35
2. Dealing with failing banks 37
Appendix: List of Core Principles for Effective Banking Supervision Issued by Basle Committee in September 1997 39
Part Three The Chinese Foreign Exchange System 42
Ⅰ. Overview 42
Ⅱ. Exchange Arrangement 43
Ⅲ. Foreign Exchange Operations of Financial Institutions 43
Ⅳ. Supervision of Foreign Exchange Accounts 44
Ⅴ. Current Account Transactions 46
Ⅵ. Capital Account Transactions 47
1. Overseas Investment 47
2. Extenal Borrowing in loans 48
3. External Guarantee 48
4. Registration System for External Debt 49
Ⅶ. Reporting of Balance of Payments Statistics 50
ⅤⅢ. Definitions in the Section 50
Part Four Intermediary Services 52
Ⅰ. Intermediary Services 52
1. Relationship between Bankers and Customers 52
2. Settlement— Payments and Funds Transfer 54
3. Trust Services 60
4. Lease 61
5. Factoring 62
Ⅱ. Financial Markets 63
1. Introduction 63
2. Money Market 65
3. Capital Markets 71
Ⅲ. Investment Banking 75
1. Backgro unds 75
2. Investment Banking Activities 78
Ⅳ. Banking on the Intemet 82
1. Backgrounds 83
2. On-Line Banking Products 85
3. The Challenging Issues in Internet Banking 87
4. The Future Prospects of On-Line Banking 87
Part Five Loans 90
Ⅰ. Categories of Loans 90
1. Common Loans 90
2. Particular Loans 96
Ⅱ. Credit Planning 99
1. Assets and Liabilities Management 99
2. Profitability and Budgetary Control 103
Ⅲ. Borrower Screening 105
1. Credit and Finance Analysis 105
2. Feasibility Study and Project Appraisal of Long-Term Lending 112
Ⅳ. Credit Risk Management 120
1. Credit Portfolio Management 120
2. Credit Origination and Management 123
3. Credit Approval and Control 125
4. Problem Recongnition and Remedial Measures 126
Part Six Accounting 128
Ⅰ. Financial Accounting 128
1. Definition 128
2. Users of Accounting Information 128
3. Specialized Accounting Services 130
4. Accounting Concepts and Principles 131
5. Accounting Equation 134
6. Classification of Assets and Liabilities 135
7. The Double-Entry Bookkeeping System 136
8. Financial Statements 137
Ⅱ. Managerial Accounting 143
1. The Use of Break-Even Concept and C—V—P Analysis 143
2. Present Value and Internal Rate of Return(IRR) 147
Ⅲ. Bank Accounting 151
1. Accounting Basis 151
2.Accounting Controls 152
3. The Chart of Accounts of a Bank 152
4. Account Reconcliliation 154
5. Types of Income and Expenditure of a Bank 156
6.Assets and Liabilities of a Bank 159
7. Bad and Doubtful Debts 162
8. Foreign Exchange Transa Ctions 163
9. The Cash Flows of a Bank 166
10. Budgeting 168
Appendices 169
Part Seven International Settlement 173
Ⅰ. Instruments 173
1. Bill of Exchange 173
2. Cheques 174
3. Promissory notes 175
Ⅱ. Means of International Settlement 176
1.Remittance 176
2. Collection 178
3. Documentary Credit 181
4. Standby Letters of Credit 189
5.Bonds 192
6. Factoring 199
Ⅲ. Documents Used in International Trade 200
1. Commercial Invoice 200
2. Transport Documents 200
3. Insurance Documents 205
4. Other Documents 206
Ⅳ. Trade Finance 206
1. Negotiation of Documentary Collections 206
2. Facilities Available in Connection with Documentary Credits 207
3. Forfaiting 209
4. Other Facilities 212
Ⅴ. Customs and Practices of International Trade 213
1. Introduction to ICC 213
2. UCP500 214
3. URR525 216
4. URC522 218
5.ISP98 221
6. Incoterms 2000 224
Part Eight Bank Letters and Telecommunications 228
Ⅰ. Bank Letters 228
1. Main Parts of a Bank Letter 228
2. Printing Styles 229
3. Sample Letters in Different Banking Transactions 231
Ⅱ.Telex 240
1. Main Parts of a Telex Message 240
2. Language 241
3. Sample Telex Messages 241
Ⅲ. SWIFT 245
1. Message Types 245
2. Fields 247
3. Structure of a SWIFT Message 248
4. Sample SWIFT Messages 249