Research On Legal System Of Financial Stability Facility

National Aid and Assistance during the financial crisis is originated from the American Economic Crisis in1930s and the Eurozone Debt Crisis in2010. During such period, the National Aid and Assistance develops from the individual assistance to common assistance, from helping the institutions to helping the whole market. As can be seen from the final effect, the National Aid and Assistance has significant influence over the economy and the stability of the society. While currently in China, to maintain the financial stability, it is the re-lending system of Chinese Central Bank that helps out the financial institutions in trouble, which can relief the financial crisis in certain degree, but re-lending per se conflicts with the independence of the Central Bank. In the meantime, as the final life-saving straw, temporary and massive capital injection from the Ministry of Finance is more likely to raise financial deficit and overheated economy. Therefore, to establish and improve the Financial Stability Facility Legal System, which will form a long-term regular protection to financial stability, is remarkably important to financial stability.The first part of the essay is about the theoretic basis and elaborations of the Financial Stability Facility. It is necessary to aid the troubled financial institutions during the financial crisis. And theoretically, the appropriate state intervention theory, financial advantage theory, the surplus public risk and the final payment theory all make solid foundation for the establishment of the Financial Stability Facility.The second part will compare and draw a conclusion of the Financial Stability Facility from the international perspective. Before setting up the Financial Stability Facility in China, the essay will make comparison between the European Financial Stability Facility and relative measurements adopted by USA, clarifying the trends of the financial legislation and instructive significance to China.In the next part, it is to point out the necessity and the feasibility to establish the Financial Stability Facility in China. As above-discussed, the Re-lending system and the direct financial capital injection do have their flaws. As a result, to introduce the Financial Stability Facility is necessary. Moreover, the preliminary financial legal framework constitutes a good foundation for the establishment and the implements of the Financial Stability Facility.The final part discusses the formation of the Financial Stability Facility from the legal perspective. The general principle, subject, aiding standard and relative regulations will be discussed. It is supposed that the Chinese Financial Stability System will be composed of Financial Stability Facility, the re-lending system and the deposit insurance system.