Comparison Research On Financial Innovation Between China And The Western

Innovation is the theme of knowledge economy,and finance holds the core of economy in a country,so financial innovation should naturally be paid close attention to. With our economy being in a transforming period,both the interior and the exterior pressure forces financial institutions to conduct financial innovation.The interior pressure comes from the deepening reform of financial system,which shakes essentially the traditional "administration finance","plan finance",and removes the monopoly of the finance step by step,so the financial institutions face the drastic competition. The exterior pressure comes from the entry of the foreign financial institutions after our country joins the WTO. The foreign financial institutions own abundant fund and mature market operation,so our institutions would be eliminated through competition if they couldn't conduct financial innovation. In brief,financial innovation is the requirement of the interior reform and the exterior opening in our finance.There is much difference between financial innovation in developed market economy of the west and that in transforming economy of our country. By analyzing the difference,this article tries hard to make the western theories of financial innovation play a positive role in the economic reform of our country. The system of financial innovation includes environment,power,factor,effect and proliferation. According to above train of thought,this article is composed of seven chapters. In the first chapter,the definition of financial innovation is induced from three layers,the second of which is used by this article. Then the history of western and our financial innovation are reviewed. The second chapter compares mainly the difference of political & cultural environment,economic environment and financial environment between the west and our country,in which financial innovation has been fostered. The third chapter makes a comparison of the causes that promote financial innovation. In the western theories,some can be applied in our country,but others can't. The fourth chapter analyses and compares the factors of financial innovation,which include human resources,information resources and technology resources. The fifth chapter compares the microeconomic and macroeconomic effect of financial innovation. Because it is unrealistic to develop financial derivative instruments in our country now,the microeconomic effect can't show. But the macroeconomic effect displays much difference between the west and our country owing to financial depression of our country. The sixth chapter researches into the proliferation of financial innovation and some of its restricting factors. The seventh chapter puts forward four ideas with regard to fostering and perfecting financial innovation in our country.This article concludesafter comparison of financial innovation in Chinese and the western,this article finds that there is a large gap between our country and the western. Now our country should positively foster and perfect financial innovation that can promote the interior reform and exterior opening of the finance,so that financial innovation can give full play to the economic transformation of our country.