Research On The Causes And Prevention Of China's Financial Risks From The Perspective Of Soft Budget Constraints

With the development of the world financial markets towards liberalization and globalization,the deepening of the degree of financial deepening,the gradual relaxation of financial control in countries makes financial risks more prone to outbreak and infection.Therefore,how to guard against financial risks effectively and to promote the development of economic sustained and healthy development has caused the high attention of governments and international organizations.As a dual transition state,China's economic construction and reform of the financial sector have made great achievements,but the problem of financial risk is gradually exposed.Since 2014,China's financial sector increasingly exposed local debt,shadow banking,defaults,bank runs has aroused widespread concern.Many people think China is on the edge of the financial crisis,China's economy is facing extremely complex and severe financial risks.Therefore,the study of the new situation of the financial risks of the formation and prevention of the problem to resolve the financial risks,preventing the financial crisis,has important significance.Soft budget constraint is a kind of economic phenomenon,when an economic organization encounters financial difficulties,it can continue to survive with the help of external organizations.We know,Soft budget constraint is a key institutional arrangement,which is the key to realize the stability of the banking system,that China has been in a state of technical bankruptcy for a long time in the state-owned commercial banks and no formal deposit insurance system has been established.From this point of view,China's financial stability model can be summarized as "the financial stability model under the soft budget constraint".Therefore,from the perspective of soft budget constraints on the formation and prevention of financial risk in China,it can enrich the theory of financial risk,and provide a useful reference for the prevention of financial crisis in China,has important theoretical and practical significance.Based on the review of the literature review,the paper analyze the cause of the financial risk,the formation of the dynamic mechanism,and the transmission mechanism from the perspective of soft budget constraint to describes a complete theoretical framework for analysis.By discussing the soft budget constraints and financial risk performance in different periods,reveal the historical evolution of financial risk.Analysis the path of the soft budget constraint and confirm the inherent logic relationship between the soft budget constraint and the financial risk in China.It also establish the credit model of soft budget constraint and commercial bank,the behavior of local government financing platform,and the causes of the financial risk of USA.Finally pointed out policy recommendations to prevent financial risks.The content of this paper is organized as follows.The first chapter introduces the background and significance of this paper,related concepts,research ideas,main contents and innovation points of this paper.The second chapter introduces the domestic and foreign scholars on the financial risk and soft budget constraint,and the research situation of simple analysis.The third chapter analyzes the causes of financial risk,the dynamic mechanism of the formation of financial risk,and the transmission mechanism of the financial risk.The fourth chapter analyzes the causes of China s financial risk,and establishes the framework of the analysis of the soft budget constraint,the moral hazard and the financial risk.The fifth chapter analyzes the soft budget constraint and the financial risk of commercial banks.Point out the formation mechanism of the soft budget constraint of state-owned commercial banks.The sixth chapter is an empirical analysis about the financing platform and the financial risk of the local government.The seventh chapter is the causes of the financial risks in the United States.Through the analysis of the causes of the American subprime mortgage crisis,we got the relevant experience.In the eighth chapter,we put forward some policy suggestions on preventing financial risks from four aspects: the hardening of budget constraints,the strengthening of financial supervision,the optimization of financial structure and the establishment of early warning index system.