Under The Perspective Of Financial Innovation, Financial Control Study

A wave of financial innovation has swept the financial circles in the west since the 1970s. On the one hand, financial innovation has improved the efficiency of the configuration of financial resources and promoted the development of the financial sector. On the other hand, financial innovation has increased the risk in the financial sector, which directly or indirectly causes the occurrence of global or local financial crises. The two sides of financial innovation can demonstrate the necessity to impose regulation on it.Financial regulation can decrease the risk brought about by financial innovation and maintain the stability of the financial sector. However, financial regulation may cause a new round of financial innovation which makes it necessary to make relevant adjustment the regulation systems. The game between financial security and efficiency is embodied in this kind of development: financial development entails financial innovation as its momentum, meanwhile it also needs financial regulation to maintain the security of financial system, and the interaction between them facilitates the sustained and stable development of the financial industry.Financial regulation and financial innovation do not happen unconditionally, they are restricted by their respective costs and incomes. Any regulation and innovation only takes place when the expectant income exceeds the cost. However, people only pay attention to the income of financial regulation in reality and ignores the cost to some extent. As a result, the regulatory authorities cannot set down the proper regulatory policies and financial innovation cannot go on smoothly. For illustration, at present in China, as administrative regulations still...