Research Of China Systemically Important Banks Regulation Of Negative Externalities

After the sub prime crisis, macro prudential supervision become the trend of international financial regulation, because it’s unable to solve the resulted due to the complex association between the risk accumulation even if prudential supervision better, and systemic risk propagation dependent on the interaction between financial institutions to each other. "Too big and not fall" become the focus and difficulty in the field of financial supervision gradually, the Systemically important banks(hereinafter referred to as SIBs) concept proposed. And the international community gradually realized by systemically important financial institutions(hereinafter referred to as SIFIs) to lead to huge negative external issues of systemic risk, and thus caused the financial, economic and social devastation. In order to guard against the negative externality of SIBs, it is the right way to regulate the SIBs to in case of the system risk.Throughout the crisis since the Chinese SIBs regulatory practices, SIBs regulatory legislation focused on "Basel III" and other relevant documents, as well as domestic "Chinese banks new capital regulatory standards guidance", "commercial banks leverage approach" "commercial banks’ capital management approach(trial)", "commercial banks’ supervision rating internal guidelines", "commercial banks’ liquidity risk management practices" and other normative documents. In early 2016 the central bank introduced a MPA system, based on Chinese new normal finance and interest rates reform, which aimed to strengthen banking supervision from a macro prudential perspective, especially SIBs regulation. At present, China SIBs capital adequacy ratio has been ahead of compliance with growing profitability and rising loan scale and controllable liquidity ratio. However, affected by the economic downturn with the funds tension in 2013 and the stock market volatility in 2015, regional and systemic financial risks keep rising, while SIBs are constantly subjected to the test. The foundation of SIBs risk management is not solid. Operational efficiency and capital allocation efficiency is yet to be improved. There exist many problems in SIBs regulation. It is a long way about Chinese financial supervision and regulation of SIBs. Based on this international and domestic background, the paper tried to analyze SIBs negative externalities problems through the economic and legal research methods, combined with domestic and international regulatory practices and trends meanwhile seeking SIBs negative externalities regulatory measures which has important theoretical and practical significance.This paper, from the point of view of the whole, is divided into three sections, the upper, middle and lower. From the point of view of logic and content, the first section is the first chapter, the second chapter, and the third chapter.The first chapter is to determine SIBs negative external regulatory topics through reviewing the literature. The second chapter is to analyze SIBs external by the economy and law method, exploring the law outside connotation from the starting point of the economy which is prepared for the next chapter. The third chapter, based on the analysis the last one, tried to seek the cracks of SIBs negative externality problem from both economic and legal theory aiming the theoretical basis for the SIBs negative external regulatory. Medium length is the core part of the article which is composed of three chapters. In the fourth chapter through the analysis of the Chinese SIBs negative externalities transmission mechanism and performance the paper deepened the understanding of Chinese SIBs negative externality problem.The fifth chapter with the analysis on the legislation of current status of SIBs from a law perspective and SIBs monitoring indicators from an economic perspective reshaped the regulatory status of knowledge and indicated the presence problems of SIBs regulatory issues.Chapter VI is the investigation of SIFIs international regulatory practices aiming to explore new trends in the post-crisis financial regulation and the experience of supervision SIBs. The last section is the full application of the theory which are divided into three chapters, namely the argument based on the middle section.Chapter VII proposed the regulation on financial inclusion concept with the empirical research on Chinese banking security, efficiency and fairness after the release of the "new regulatory standards guidance" in May 2011 and noted the financial inclusion as the supplement of the supervision of SIBs.Chapter VIII proposed Chinese SIBs study of negative external regulatory mechanisms, based on the idea of law, which gives the connotation of finance regulation. The ninth chapter is the conclusion and prospect of this article.According to the research goal, the research innovation of this paper is mainly reflected in the following aspects:First, Concept of financial inclusion in financial supervision. Financial inclusion philosophy is a new perspective and new trend in the international financial regulatory reform as well as the new media of financial balance target "safe, efficient, fair". Financial inclusion which advocates equitable regulatory objectives will help financial institutions get rid of profit-oriented and the unlimitedly crazy pursuit of profit which can crack the moral hazard in the financial crisis with the positive motivating factor through a kind of new regulatory. It is an important mean to achieve the goal of financial supervision. Furthermore, financial inclusion is the supplement of SIBs supervision which is different from the non-SIBs. Through the social responsibility practicing of SIBs under the concept of financial inclusion, it can help poor areas get financial support and protect the interests of consumers as a whole and build a quarantine risk firewall in the financial context of deepening reform.Second, according to the principles of economics in the cost-benefit method, the paper uses the utility function to construct the theory of taxation model of SIBs negative external which is the tax expression of taxation and provide a theoretical basis.Third, the paper makes the problem more persuasive by using methods including normative law research and empirical economics analysis. Specifically, in the analysis of the inclusive financial concept, besides the legal normative analysis method, this article uses the method of the law and economics which analyzes 12 listed banks annual data from 2006 to 2014 and uses econometric regression analysis method validation "new regulatory standards guidance" on the Chinese banking security, efficiency and fairness after the release. The study found that regulatory standards change which lowered non-SIBs security. But it did not have a fair impact on all banks. The change in the regulatory rule does reduce the risk and the ability to absorb losses of SIBs. However, it improved SIBs security presence with a certain effect.Fourth, the paper is based on the analysis of the basic negative externalities theory of SIBs, using the ideas of law, giving the connotation of finance which is aiming to build China SIBs negative externalities regulatory mechanisms responses: First, using economic methods to build levy tax theoretical model which gives the theoretical taxation crack of SIBs negative externalities. Second, establishing pre-and post-settlement mechanism by the legal methods. In advance defining the rights and obligations of the aggressor and victim, which is subject to a SIBs obligation and give non-SIBs, national, taxpayer more rights aiming to correct the interests conflict between SIBs and other subjects in order to achieve regulatory SIBs negative externalities effects; afterwards focuses on deposit insurance system as the basis which improves the disposal of the market crisis for SIBs(exit) mechanism. Third, the concept of financial inclusion by practicing SIBs social responsibility to address the negative externalities as a social problem making up the Law and Economics regulatory deficiencies. Fourthly, combining the external frontier of development theory, put forward to improve the rights of shareholders and depositors relief mechanism to address the increase due to regulatory agencies expect moral hazard relief under the unreasonable regulatory system and the social costs. Finally, according SIBs own characteristics, proposed to strengthen the macro-prudential supervision which can build comprehensive monitoring mechanism countermeasure negative externalities for SIBs in China.