The Research On Institution Change Of Financial Regulation In China

As the core of the modern economy, financial industry plays an essential role in economic development. Meanwhile, financial industry belongs to the risky trade with natural fragility, and the accumulation of financial risk can easily lead to financial crisis. Especially in the situation of contemporary economical and financial globalization where financial risk and financial crisis spread internationally with faster speed and stronger destructiveness, financial security becomes a general focus which people are concerned with. That "institution is important" has become a common understanding. What has been always highly concerned by the financial supervision authorities and the theory fields throughout the world is how to set up more cost -effective institution during the course of financial supervisory institutional change to ensure the smooth realization of the financial supervision goals of security, efficiency and fairness.This paper researches the institution change of financial supervision of our country and puts forward the frame of the financial supervision suitable for our country according to the result of study by using modern economical and financial theories such as the theory of institution change, etc., and using the successful experience of the institution change of financial regulation of western developed country for reference. It points out that institution is mandatory behavioral rule with binding character to people and organization. And financial supervision institution refers to the rule, convention, organization and arrangement, policy concerning financial supervision, etc. The determination of rational regulation goal is an important task of the financial supervision change. The rational regulation goal system should include three respects of security goal, efficiency target and fairness target, and security goal should be the primary goal which one country's regulatory authorities devoted to realize.The institution change of financial regulation of western countries have offered very beneficial enlightenment and experience to draw lessons from to the institution change of financial supervision of our country. The main enlightenment of the change of financial supervision of western countries given us includes such as to construct the supervision idea of paying attention to stability and efficiency equally, to change financial supervision mode appropriately, to emphasize appropriate supervision, to strengthen the coordination of international supervision and to pay attention to the legal system construction of financial supervision, etc. Researching from the course of financial supervision change in China,there wasn't financial supervision in modern sense before reform and opening-up. Since reform and opening-up, the financial supervision institution has changed taking market as the lead, the separate financial supervision has been established formally after 2003. With the development of economy and finance, the efficiency of financial supervision of our country is improved progressively. The financial supervision of our country has been advancing with five characteristics:progressiveness, government leading, gradually strengthening demand-induced institutional change, Lagging of development of finance, and the transformation from administrative decree to the authoritative supervision.Institutional disequilibrium is the prerequisite of financial supervisory institutional change. On one hand, there exits inadequacy of institution supply in separate financial supervision and mixed management, deposit insurance system, disclosure of information and financial legislation, etc. On the other hand, the present financial supervision system has problems of redundant institution supply like excessive administrative interference and rent-seeking, insufficient independence, over-restriction of market access etc. The financial supervisory institution of our country needs gradual reform and improvement, in order to meet the demand of socio-economic development.On the institution change way of our country's financial supervision, this paper proposes that our country should take the progressive way in financial supervision institution change. Under the present limited mixed finance institution, it should continue to strengthen and improve separate supervision institution while strengthening the institution construction of coordination among the organizations. The finance in our country will enter the overall stage of mixed management in the future. With the further promotion of the reform in banking system, the further improvement of the financial supervision level, and the completion of the institutional construction in various fields, financial regulatory system in our country should be transformed into integrated supervision gradually. In the course of financial supervision change, there is still much to be improved such as the pluralistic supervision system, risky supervision, information disclosure, the explicit deposit insurance system and legal system of financial supervision, etc.