Study On China's Financial Supervision System Changes And Financial Efficiency In Transition Period

Since 1970's, the financial industry has undergone the most profound change in history. As the financial derivatives transactions increased and the information technology had impacts on the financial business, the functions of financial institutions and the client structure underwent tremendous changes. Various financial institutions began to penetrate other financial services fields, as a result, the boundaries between the financial industries increasingly blurred. In order to adapt to changes in the financial sector and enhance the efficiency of the financial sector, the western countries reformed the financial supervising system and started to implement a series of deregulation measures.In addition to have similar course with that of Western countries, the evolution pattern of China's financial industry has its own characteristics. To strengthen financial supervision and prevent macro financial risks, China has implemented the strict "separate operation and separate supervision" model from the year 1995. However, because of the too strict regulation, the lack of good interaction mechanisms for funds and the oneness for business tools between the banking system and capital market, the competitiveness and growth of commercial banks and capital market were constrained seriously. So fundamentally improving the overall competitiveness is the development direction to our financial industry. The financial supervision system is an important part of the financial system. The reform of financial supervision system has vital status and functions to the success of financial reform. As a "visible hand" in financial market, in addition to maintain financial stability and security, the financial supervision has the responsibilities of overcoming market failures, reducing negative externalities of financial market, decreasing financial transaction costs, improving the efficiency of resource distribution and promoting the efficiency of financial market. Seeing from the practice of China's financial supervision, from setting the central banking system to selecting the separate operation model, China's financial supervision system is constantly improving with the gradual reform proceeding. However the separate supervision...