| Financial innovation and financial supervision keep developing under the continuous interaction. It can be found that, from the study of the comprehensive literature, financial innovation has both advantages and disadvantages, it can not only improving the effectiveness of the financial market, but also promoting the mature development of financial market, and such benefits as meeting the customer diverse demand and improving profitability and market share of financial institutions. However, the development of financial innovative products will also pose a risk to the financial market, which increases the difficulty of supervision.At present, the phenomena of poor quality, low innovation and serious of domestic financial innovative products can lead to a higher risk, which could bring a new round of financial crisis. Therefore, in order to make up for the defects of the financial market, the supervision departments should strengthen the supervision to improve the quality of financial innovative products and ensure the stability of the financial market. However, the regulatory authorities on the financial innovative products, on the one hand, will ensure the stability development of the financial market; on the other hand, it will curb the enthusiasm of innovation, thereby reducing the high quality of financial innovation. Therefore, on the basis of game relationship between financial supervision and financial innovation, the game relationship between financial supervision and the quality of financial innovative products is studied in this paper from the perspective of improving the quality of financial innovative products.First of all, define the conception of financial innovation,the quality of financial innovative products and financial supervision, and then summarize the financial innovative motivation and the relationship between financial innovation and financial supervision.Financial innovation is that the financial manager, financial intermediaries and financial institutions innovated in the field of financial tools, institutions, markets and financial business, including the following five conditions: the emergence of new products orservices, the emergence and application of new technology,the supply of new resources,the development of new markets and the establishment of new organizations.High quality innovative financial products are those financial innovative products carried out lawfully and compliancily on the basis of comprehensive stability of the financial system and the enterprise development,which will not bring a high risk to the entire financial system,liquidity is strong,infectiousness is low and the benefit of its investors is also high.Secondly, analyze the game relationship between financial regulation and the quality of financial innovative products based on the game relationship between financial innovation and financial supervision, then construct the complete information static game model and complete information dynamic game model about the quality supervision of financial innovative products. According to the Nash equilibrium and sub game perfect Nash equilibrium, the relationship between the quality of domestic financial innovative products and the revenue along with additional cost in high quality innovative financial products,income and punishment in low quality innovative financial products, punishment to the supervision departments because of inadequate supervision, as well as additional cost of strengthening supervision are summed up. The results of the game display:Financial institutions tend to make more high quality innovative financial products, the high quality innovative financial products have higher returns and lower additional cost;More financial institutions will select low quality innovative financial products due to the higher income in low quality financial innovative products and smaller penalties of the regulatory;Strengthening supervision will be taken due to the high punishment for inadequate supervision;Deregulation work will be taken by regulators as a result of higher cost. At last put forward suggestions to improve the quality of financial innovative products in our country by analyzing the results of complete information static and dynamic game.Thirdly, analyze the game relationship between financial supervision and financial institutions under the condition of asymmetric information, build the incomplete information static game model and incomplete information dynamic game model on the quality supervision of innovative financial products, through calculating the Bayesian Nash equilibrium and the perfect Bayesian Nash equilibrium, based on the analysis of therelationship between financial supervision and high quality innovative financial products, it is concluded that in the case of asymmetric information, the innovation of high quality products are the best strategy for financial institutions, while financial institutions select with a certain probability for innovation of low quality financial products. It shows that, combined with the analysis of equalization result, smaller additional cost for the regulators, increased penalties to the financial institutions for low quality of innovative financial products, as well as increased penalties to the supervision department for inadequate supervision and increased capability of supervision and judgment for supervisors are needed to reduce the low quality innovative financial products. These measures, to a certain extent, ensure the stability of the financial market.Finally, combined with Nash equilibrium, sub game perfect Nash equilibrium, Bayesian Nash equilibrium and the perfect Bayesian Nash equilibrium provide reference suggestions for regulators and financial institutions from the perspective of the relationship between the financial regulatory authorities and financial institutions, aiming at how to improve the quality of financial innovative products. |
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