Financial industry refers to a special industry dealing in financial commodities, including banking, insurance, trust, securities and leasing.

Characteristics of financial industry

The financial industry has the characteristics of index, monopoly, high risk, interest dependence and high debt management.

individual

Indicators mean that financial indicators reflect the overall and individual situation of the national economy from all angles, and the financial industry is a barometer of the development of the national economy.

monopolize

On the one hand, monopoly means that the financial industry is strictly controlled by the government, and no unit or individual may set up financial institutions at will without the approval of the central bank;

On the other hand, it refers to the relative monopoly of specific financial business. Credit business is mainly concentrated in the four major commercial banks, securities business is mainly concentrated in national securities companies such as Cathay Pacific, Huaxia and Nanfang, and insurance business is mainly concentrated in PICC, Ping An and Pacific Insurance.

high-risk

High risk means that the financial industry is a distribution center for huge amounts of money, involving all sectors of the national economy. Any mistakes in business decisions of units and individuals may lead to "domino effect".

Interest dependence

Interest dependence means that financial interests depend on the overall interests of the national economy and are greatly influenced by policies.

High debt management

High-debt management means that the proportion of self-owned funds is lower than that of general industrial and commercial enterprises. The financial industry plays an important role in the national economy, which is related to economic development and social stability, and has the functions of optimizing the allocation and adjustment of funds, reflecting and supervising the economy. The unique position and inherent characteristics of the financial industry make all governments attach great importance to the development of their own financial industry. China has a process of understanding and developing this. In the past, China's financial industry developed slowly and irregularly. After more than ten years of reform, the financial industry is developing at an unprecedented speed and scale. With the steady growth of economy and the deepening of economic and financial system reform, the development prospect of financial industry is very broad.

The emergence and development of financial industry

The financial industry originated in the Babylonian temple in 2000 BC and the Greek temple in the 6th century BC. From the 5th century BC to the 3rd century BC, money dealers and commercial institutions like banks appeared in Athens and Rome. In Europe, modern banks developed from currency exchange and goldsmith. The earliest bank appeared in Venice, Italy (1580). 1694, Britain established the first joint-stock bank-the Bank of England, which established the most basic organizational form for the development of modern financial industry. Since then, the financial industry in capitalist countries has developed rapidly, which has greatly promoted the accumulation of capital and the concentration of production. 19 at the end of the 20th century, major capitalist countries entered the stage of monopoly capitalism. The mutual penetration of bank monopoly and industrial monopoly capital centered on credit activities forms financial capital, which controls the lifeline of capitalist economy. The starting point of China's financial industry can be traced back to the institutions dealing with credit business in the Zhou Dynasty before 256 BC, which were called "Quanfu" in Zhou Li. In the Southern Qi Dynasty (479 ~ 502), there appeared an institutional "quality bank" that used the collected objects as collateral to lend money, which was later the pawnshop. At that time, it was run by temples, monopolized by nobles in the Tang Dynasty, and private banks appeared in the Song Dynasty. At the end of the Ming Dynasty, Qianzhuang (called Bank in the North) was once the main body of the financial industry. Later, Qianzhuang, Guanyin Qianzhuang and other financial institutions appeared one after another. Due to the long-term feudal rule, modern banks appeared late in China. After the Opium War, foreign banks began to enter China, and the earliest one was Li Ru Bank of England (1845). Subsequently, Macquarie Bank (Standard Chartered Bank) and HSBC Bank, Dehua Bank of Germany, Zhengyin Bank of Yokohama, Japan, Oriental Bank of Credit Suisse Bank of France and Dawson Bank of Russia were established one after another. The first bank founded by China people was China Commercial Bank established by 1897. After the Revolution of 1911, especially after the beginning of the First World War, China's banking industry began to develop rapidly, and banks gradually became the main body of the financial industry, while banks and banks retreated to a secondary position and gradually declined. The development of China's banking industry basically promotes the development of national capitalist industry and commerce. This shows the close relationship between finance and industry and commerce, and its important influence on the national economy. After a long historical evolution, the modern financial industry has gradually developed into a variety of financial institutions from a relatively single form in ancient society. In the modern financial industry, all kinds of banks occupy a dominant position. Commercial banks are the earliest and most typical forms of modern banks. Although city banks, deposit banks, industrial banks, mortgage banks, trust banks and savings banks are all engaged in financial business, their business nature is often very different, and the financial authorities often limit their business scope. Modern commercial banks generally operate a variety of financial services. In addition to a large number of branches in China, large commercial banks often have branches abroad, thus becoming a world-wide multinational bank. Modern large commercial banks are usually the financial centers of large monopoly consortia. Holding company has become an important organizational form of financial industry in contemporary developed capitalist countries. Different from commercial banks, they are specialized banks. Specialized banks are generally funded or supervised by the state (government). Its business, especially credit business, is mostly concentrated in one or several industries, with emphasis on supporting the development of certain industries. The establishment of the central bank is a milestone in the development history of the financial industry. In the modern financial industry, the central bank is in a dominant position. It is the bank of currency issuing banks, government banks and banks, responsible for formulating and implementing national financial policies, regulating currency circulation and credit activities, and is also the management and supervision organ of general financial activities. In addition to banks, modern financial industry also includes various cooperative financial organizations (such as cooperative banks, mutual banks, credit cooperatives or credit combinations). ), finance companies (or commercial banks), discount companies, insurance companies, securities companies, financial consulting companies, professional savings and remittance institutions (savings offices, postal savings and remittance bureaus, etc.). ), pawn shops, gold and silver industries, financial exchanges (stock exchanges, gold exchanges, etc.). The management methods of modern financial industry have been very modern, and electronic computers and automation services have become quite popular.

Further reading: How to buy insurance, which is good, and teach you how to avoid these "pits" of insurance.