Research On China's Banking Reform Of The Financial Costs And Financial Risks

In the process of economic restructuring from a planned economy to a market, the phenomenon that expansion of our government boundaries,the financial and monetary functions of the "Absence" and "Offside" is widespread. It is due to the long planned economic system and market, imperfect laws and regulations. And banks industry has alienated our country's "second finance", which are faced with many unstable factors.Once these unstable factors break out, the final bearer must be finance who play a "reveal all the details" role in crisis. Then crisis will turn into a financial risks. For the healthy and stable development of China's banking industry, the banking reform is under the guidance of the government. The supporting of banking reform from government would directly or indirectly increase the cost of financial expenditure. When the financial costs is out of control, it is likely to lead to the occurrence of financial risks.The article is based on the government's financial costs and financial risks that may arise which in process of Chinese banking reform. It researches on whether the involvement of our government and position of banks is appropriate and how to control the financial risks arising from the banking sector problems.At first, the article defined the financial costs and financial risks, analyzed the financial costs and financial risk, our government and our banking relationship, pointed out that the government over poke his nose into banks. As well as support the banking reform, the high financial costs that the government undertake directly or indirectly may cause financial risks, making the potential crisis transferred to the financial head by government intervention. Then, the paper discussed the government's high financial costs and the resulting financial risks to whick through the injection of banks, eliminating bad assets and to provide hidden subsidies, tax incentives and other means may lead.Paper also use the international comparison and reference about the controlling of costs and risks.The article first analyzes the banking crisis on the financial costs and the financial risks.Then,it summarized how the transition countries and developed countries are position and adopte the policies while solving the banking crisis.Article concludes policies that the government control financial risks from the banking at last. Under the premise of a clear government position, re-defining between the market, the banks and the government, we should definite the central and local government reasonable to strengthen the financial expenditure management. It must build the state-owned commercial banks, risk management and control mechanisms, and establish the deposit insurance system.