Financial System Soundness

Issue on financial system conservation concerns the overall situation of the development of economy and finance. The unsteady financial system will result in systematic financial risk and crisis, especially in developing countries, the unsteady factors in financial system will certainly appear gradually as their economic market course and even cause financial turbulence due to unsound market mechanism and legal system ,thus it becomes a focus point of people both at home and abroad. Taking Marxism-Mao Zedong Thought and Deng Xiaoping Theory as guide and applying such combining methods as standard analysis with positive analysis, historical analysis with current analysis and quantitative analysis with qualitative analysis, this paper explores the conservation problems existing in financial systems both at home and abroad and raises the countermeasures to solve them.The paper consists of six chapters and is divided into three parts according to their inner link.Part I ,i.e .chapter 1 mainly discusses the forming and development of monetary credit relations and financial system; characteristics, classification, function and availability of financial market and financial institute; the position of financial industry in national economy; the definition and yardstick of financial system conservation; principles and relationship a moderate financial system must obey and deal with ;and significance of financial system conservation. The main purpose is trying to. reveal the dialectical relationship between economy and finance, especially the huge reaction of finance to economy along the locus of history of economic theory.Part II ( from chapter 2 to chapter 5) mainly analyzes the factors affecting financial system conservation. In this course the author makes a review on relevant theories of western economics schools from Maxism's position and point of view and studies how to eliminate the influence of unsteady factors on financial systemAccording to the principle that economy determines finance, chapter 2 analyses the role that periodic change of economy and investment and economic non-equilibrium development play in financial system conservation ; clarifies the characteristics of financial structure in different kinds of countries and relevant issues on moderate financial system ; reveals the sources causing economic and financial foam and raises the yardstick of economic and financial foam and the countermeasure to eliminate themIn chapter 3 ,the author studies the financial system conservation from the angles of system and policy of economy and finance and thinks that inner frailty of financial system caused by unsymmetrical information, the choice of enterprise financial model and system ,and the macro-economy especially the determination of finance and monetary police have greater influence on financial system conservation. Meanwhile ,the author also analyzes the different effects of financial system on financial system conservation with some principles on financial repression and deepening theoryChapter 4 mainly discusses issues on financial system conservation caused by speedingup of international capital flow, especially short-term capital flow .increasing of speculative factors, and different foreign exchange rate system under the circumstance of economy and finance integration. The author thinks opening capital market carefully and keeping reasonable and moderate foreign exchange reserve will be helpful to keep a lookout and minimize international financial risk.Chapter 5 expounds the relationship between moderate operation of financial system and strengthening financial supervision ,including strengthening the construction of financial law and the inner control and effective external supervision of financial enterprises.Taking history as an objective lesson and applying theory to Chinese reality, part III analyses the moderate problems existing in Chinese current financial system such as inner frail of financial system and potential financial risks in securities market and fore...