Branch system: the branch system is a management system with branches at home and abroad outside the head office or the general management office. In China, according to the provisions of the Commercial Bank Law, the branch system is also implemented.
Unit banking system: Unit banking system, also known as exclusive banking system, refers to a banking system in which only a single institution can operate and no branches are allowed.
Bank holding company system: a bank holding company, also known as a bank holding company, generally refers to a company established specifically to control or acquire shares of two or more banks.
Their characteristics are as follows:
1. Branch bank: It can better serve the needs of local customers, and at the same time avoid the collapse of the whole system caused by the operational risk of one bank nationwide.
2. Unit banking system: Each unit has relatively independent quick decision-making ability and can respond to market changes more flexibly.
3. Bank holding company system: By holding a number of banks and financial institutions, scale effect can be achieved, capital utilization rate can be improved, and risks can be better controlled.
The organizational system of commercial banks has its own advantages and disadvantages, as follows:
I. Branch banking system
Advantages:
1, which can better meet the needs of local customers and provide more personalized services;
2. In terms of risk control, each branch is relatively independent, which can be decentralized to reduce systemic risks.
Disadvantages:
1. Poor information exchange among branches may lead to low operational efficiency of the whole bank;
2. Across the country, the operational risk of a bank is too high, which may lead to the collapse of the whole system.
Second, the unit banking system.
Advantages:
1, each unit has relatively independent management and decision-making power, and can respond to market changes more flexibly;
2. In terms of risk management and control, each unit has its own profit responsibility, which can effectively prevent various risks.
Disadvantages:
1, there are often problems such as repeated investment and waste of resources between units;
2. For those businesses that span multiple units, it is difficult to coordinate the cooperation between units.
Third, the bank holding company system.
Advantages:
1. By integrating the resources of several banks or financial institutions, scale effect can be realized and capital utilization rate can be improved;
2. Holding companies can better control the risks and operating conditions of banks or financial institutions.
Disadvantages:
1. Centralized management of holding companies may affect the flexibility and reaction speed of branches;
2. In terms of risk management and control, as many banks or financial institutions are involved, there may be problems such as waste of resources and information asymmetry.