Study On The Market Response Of Administrative Penalties Of Financial Supervisory Institutions

Finance is the blood of a country’s economy.The development of the national economy and the enhancement of comprehensive national strength are inseparable from the support of the financial industry.In the early days of China’s financial industry,due to multi-party restraint,there has been no outstanding progress.In recent years,with the reform of the economic system and the establishment of the capital market,the financial industry has gradually moved to modernization,but it is still relatively immature compared with developed countries.At present,China’s finance is still an intermediary-led model,that is,the operation of finance as a whole depends on financial intermediaries,while our financial intermediaries are mainly commercial banks,and more than 90% of financial assets are concentrated in the banking industry.The importance of commercial banking institutions in China’s financial and economic development is evident.Since the establishment of the capital market,despite the concerted efforts of many parties,listed companies have repeatedly banned violations,and commercial banks are no exception.China’s commercial banks operate in a branch mode,with many business outlets,and the types of business operations of commercial banks are diverse.In the course of their operations,they may be for personal gain or dereliction of duty,and violations of regulatory regulations often occur.The China Banking and Insurance Regulatory Commission(hereinafter collectively referred to as the "CBRC")is the main institution for the supervision and management of the banking industry in China.When a commercial bank violates regulations,the CBRC and its local agencies,the CBRC,shall administer the banks in violation of regulations in accordance with relevant regulations.Penalties are decided and publicized.The market is sensitive.When the listed banks are subject to administrative penalties when they enter the market,it will inevitably cause a certain market response.This article uses the administrative regulations made by the CBRC and the CBRC from January 1,2017 to June 30,2019.The punishment decision is a sample,using the event research method to study the response of China’s A-share market to administrative penalties of financial regulatory agencies.First,the overall response of China’s A-share market is studied with all A-share samples.Second,a comparative study of the A-share sample and the Hong Kong stock sample was conducted to explore the differences between the two markets’ response to administrative penalties.Thirdly,the punishment objects are the sample classifications when the banking institutions and the banking institutions and the executives are punished at the same time.It is studied whether the market response is different when the punishing objects include bank executives.Finally,the market response research was conducted on the administrative penalty samples made by the CBRC and the CBRC,and the analysis of the administrative penalty decisions made by the CBRC and the CBRC was used to analyze the differences in market response.The research results show that the notice of administrative punishment carries significant negative information.The excessive cumulative gains in the stock market of commercial banks that have been subjected to administrative punishment show a significant downward trend during the window period.Administrative penalties by regulatory agencies will lead to negative reactions in the market.However,compared with the Hong Kong stock market,the A-share market is less responsive to administrative penalties,and the reaction speed around the day of the incident is not as fast as that of the Hong Kong stock market.The Hong Kong stock market has a stronger and more agile response to administrative penalties.In addition,the A-share market’s response to the administrative punishment decision made by the CBRC at this level is greater than the administrative punishment decision made by the CBRC at the same level,but the target of the punishment is that the banking institution or the institution and the executive are punished at the same time,and there is no significant difference in market response.