Financial Fragility Transmission Mechanism And The Choice Of Modern Chinese Finance Mode

Basic connotation of financial fragility emphasizes the fragility as the nature of financial industry-determined by the characteristics of its high liability. This is the financial fragility in narrow sense. In a board sense, financial fragility refers to a financial situation with an inclination of high risks, including all the accumulation of risks in all the financial fields, such as liability financing and equity financing. Financial fragility has the trend of self-reinforcement with the expansion of financial market. With China's finance further opening to the world, financial situation becomes more complicated and the conduction effect increases between domestic and international after China entered WTO, While the problem of financial fragility has become striking. If not paying more attention, it will threaten the stability of Chinese economy. Therefore it is necessary to choose one financial mode fitting for China in order to insure the steady development of finance and society.The first and second part of the article introduces the evolution of financial fragility's theory. The research of financial fragility mainly includes the fragility in traditional credit market and in financial market. The fragility in traditional credit market is expounded through Minsky's"Financial Fragility Hypothesis",Kregel's"Margins of safety"doctrine and informational economics. The fragility in financial market stems from the excess fluctuation of asset price and exchange rate market and the interaction of the different financial market price fluctuation. The third section of the article firstly analyzes the domestic and international transmission model of financial fragility. The research of transmission models are mainly based on the following transmission mechanisms such as international trade channel,international capital flow channel, economy globalization and net contagion. Then the section discusses the evaluation and warning analysis of the financial fragility and tries to gain some beneficial experiences about establishing our financial fragility warning supervision system through studying the international warning models.The fourth part of the article firstly discusses the developed country's financial system and characteristic and its anti-fluctuation analysis. Consequently we can detect the disadvantage resulted in our financial system. The fifth part tells the characteristic of our financial system and financial reform, indicating that the optimized choice of our country's financial regulation mode is'one bureau and two committees'and the object mode of financial development is the integrated management.Finally, some suggestions are made to handle the financial fragility, i.e. to strength financial regulation, to reinforce the stability of the banking system, to standardize the stock market, and to carry out positive and stable fiscal policy.