On China’s Financial Macro-Control System Optimization An Central Bank Perspective After The Subprime Crisis

Financial macro-control system is an improtant part of the mational finance and its health is directly related to the security and stabiltiy of a country’s financial system.After the subprime mortgage crisis, the world is looking for positive measures to cope with the lack of financial macro-control situation.Facing the effect of finacial crisis on China, China’s central bank also made profound introspection and adopted measures positively.There are different opinions on the reasons of global financial crisis tiggered by US subprime mortgage, but no doubt, the financial crisis has exposed many loopholes and problems of the global financial macro-control system and regulatory measures,so as the main responser of the financial macro-control,the central bank’s role and mission will be changed by the influence of the cirisis.In fact, in many countries, the crisis has strengthened the role of the central bank in financial regulation.It is also worth noting that many central banks have been given the new resposibility by establishing the framework of macro-prudential supervision.Therefore, it is significant to rethink the global financial crisis, macro-control system and the stability of financial system from the perspective of central bank.Especially, in the condition of globalization, it is very significant theoritically and practically to how to conduct the lesseons from the crisis by learning from the experience of developed countries,to give full play to the central bank in prudent macroeconomic management combined with China’s sepecifc mational conditons, to the estalblishiment of an effecitive financial macro-control system in order to promote the sustainble and stable develepment of China’s fianacial industry and economy.This paper, breaking the preivious theory perspective, re-anlyzes the financial crisis systematically. First of all, it sums up the challenges of subprime mortgage crisis on the macro-control theory,which leads to the main content of this paper. Secondly, considering the development of macro-control theory as the propositon of study in the circumstance of subprime crisis, it analyzes the problems and challenges of China’s fianacial macro-control system by the use of theoretical dna empirical methodologies. Thirdly, it provides a theoretical explaination to optimaze China’s financial macro-control system from a new theoretically perspective.Finally, it gives the path to optimize the macro-control system of China. This paper is divided into seven chapters.Chapter I, Introduction. It presents the backgroud and significance of this study, and makes a brief literature review, and explains the the structure and research methdologies, and the weakness of this paper also describled.Chapte Ⅱ, The challenges to the financial macro-control thoery from the subprime crisis.It reviews the subprime crisis and give a systematic analysis of the causes of subprime crisis. It focuses on analysis of chanlenges towards macro-control theory triggered by subprime crisis combing the practices of central banks of world’s major economies, which paves the way for the analysis of the optimal path of the development of China’s new financial maro-control theory.Chapter Ⅲ,The development of financial macro-control theory under the backgroud of subprime crisis.It gives a synopsis and critical comment on macro-prudential regulation theory, monetory policy theory,financial innovation theory, sustainbale development financial theory and inclusive financial theory related to financial macro-control.Chapter IV, The deficiencies of current China’s financial macro-control system.It presents a systematic in-depth analysis and demonstration on the deficiencies of China’s macro-control system from the aspects of the role and position of the regulators, the efficency of regulated tools, the coordination of regulatory policies, the foundation so regulation and others combining the evolution of China’s financial macro-control system.Chapter V, The analysis of reasons for optimizing China’s financial macro-control system.The reasons for the existence of deficiencies in China’s financial macro-control system are analyzed.Chapter VI, The optimization path of China’s financial macro-control system. It proposes optimization path and top-level design of financial macro-control system in China by strengthening the legal protection of financial macro-control system, improving the efficiency of regulatory tools, optimizing the policy control objectives,giving more power to the central bank, conducting the concept of macro-prudential poliy, emphasizing the coordinated development of financial innovation and regulation, as well as optimizing the financial struture etc.Chapter VII, Conclusion and outlook.All in all, this paper opens a prelude for a new round of financial reform and provides a reference and support to the future economic development and stability of the market due to the discussion of macro-control theory and system.The necessity of financial macro-control system is determined by the characteristics of China’s economic development. The construction of financial macro-control system by the government is the very important part of financial industry.Different researches having been done in various historical periods/which are all the contents of financial macro-control system, have solved many problems of different periods facing by the world’s finanacial industry. "Right tool for the right job".Financial macro-control system affect the financial industry’s future and destiny,especially in the time of crisis, which has the fountion of changing situation.Financial macro-control system should play a regulatory role in helping the achivement of development goals of the financial industry.The innovation of this paper is that; (1)it enriches an develops the theories of financial crisis and macro-control by choosing a more unique perspective-- central bank;(2)it has been trying to jump out of the financial crisis analytical framwork, not only thinking from the crisis iteself, able to focus on the issues of financial macro-control system construction and the sustainbal development of financial industry; (3)it bases on practical aspect of theory and policy study to suggest some thoughtprovoking ideas and top-level designs from the experiences gained from the global financial crisis for the future development of China’s financial macro-control system in the spirit of "combination of innovation and accumulation".However, The weakness of this paper is that it puts more emphasis on the practical aspects, more detailed empirical and econometric analysis should be done, so the conclusion might be more comprehensive.