Game Analysis Of The Legislation Of Financial Supervision On The Background Financial Gloalization

With the development of financial globalization and liberalization, waves of financial innovations have initiated the increasing appearances of financial products and their derivative tools, which give challenges to the financial watchdogs all over the world. Financial innovations have been evolving according to the cycles of innovation, the financial deregulation, new innovation and the renewal of the financial deregulation, which embodies the game process between the two in the development of financial industry. Meanwhile, financial globalization and liberalization provide a wide and deeper game stage for financial innovations and financial supervision in an undoubted way. Then, how to supervise the financial innovations, how to select the supervision patterns to ensure the minimum cost and the maximum profits and meet the biggest rational and imperative needs of the financial organizations in order to realize the balance between the financial watchdogs and financial organizations becomes the focus of my article, including the following five parts.Chapter one Financial Globalization and legislation of international financial supervision. For the perspectives of the connotation and denotation of financial globalization, I will interpret the problems of the financial internationalization, globalization and economic globalization. Also, I will argue about the property of the financial globalization, the root of its emergence and its embodiments and characteristics. Financial globalization has propelled the world-wide economical development, promoted the efficiency of the global financial industry and sped up the free capital flow and the general adoption of the market principle. In terms of international laws, its influences on the establishment of the international contracts are reflected in the formation of the frames of the multilateral laws, the supervision of "Basel Pact" on a nation's financial organizations, the gradual evolution of an international convention and the provision of the legal basis and criteria of the integrated supervision for the international co-operation and co-ordination. It also has great impacts on the national laws and promoted the internationalization and convergence of the financial policies and the internationalization of the law of the countries, which has been reflected in the fields of the quickening pace of the reform of monetary system and building of financial law system, the growing meeting between the financial laws concerning foreign affairs and the international financial uniform laws and the improvement of the harmonization between the two. At the end of the chapter, I will make an analysis of the current situation and development tendency of the international supervision laws, providing the necessary premises for the argument that the financial supervision laws can be discussed and studied according to the frame of the financial globalization.Chapter Two Theoretical analysis and supervision supposition of financial innovations and the legislation of the supervision. In this chapter, I will study the concepts, the classifications and theories of financial innovation in order to analyze the mutual function and mutual influence in the process of the financial innovations and the practice of the financial supervision, making use of the game pattern to explore the game balance between the necessity of the financial innovations and the supervision (the supervision of the watchdogs and the innovation of the financial organizations are their respective best choice) . The suppositions for Chinese financial supervision: to supervise for the sake of the promotion of the positive financial innovations and the limitation of the negative one; to actively encourage the compatibility principle and lead the inner control and market restrictions to realize the purposes of the supervision; to focus on the process in terms of the protection of the financial innovations and emphasize the precaution and supervision beforehand, not afterwards; to realize the supervision of the cost balance and profits balance and realize the balance of the ideal intensity of the supervision and reduce the cost of the submission; to promote the progressive innovative supervision, turn to the functionality, focus on the basic functions realized by the financial product, reduce the functional conflicts, overlapping and blindness; to lift the supervision on the vitality of the financial innovations, carry out the internationalized standards, win the initiatives through innovations under the frame of the new Basel capital Pact: to adjust the aims/targets of the supervision and deregulate the supervision on the basis of the standardized legislation. The financial organizations should make innovations under the guideline of the prevention of financial risks so as to realize the best balance between the financial innovations and supervision in China.Chapter Three The Game selection of the individual management and comprehensive one in the legislation of the financial supervision. The historical changes in the fields of international finance have always been together with the dilemma between the individual management and comprehensive one. In this chapter, I will employ the game pattern to analyze the dilemma of the legislation of financial individual and comprehensive management (financial controlling companies are included). I try to interpret the significance of the comprehensive through legislative values—to maintain financial security, promote efficiency and reduce the cost, and so on; to emphasize the characteristics of the legislative operation of the Western developed countries through the analysis of the selections between the financial comprehensive management and individual one and point out the values of these practices to China.Chapter Four The selection of the supervision patters in the financial legislation. First, I will explore the unique advantages of functional theories and functional supervision. The functional financial supervision established according to the basic functions of the financial systems will realize the coordination across products, institutes and markets, efficiently solve the problem of identity of the financial innovations in the process of the supervision, avoid the phenomenon of vacuum supervision and multiple supervision, reduce the supervision cost, improve the efficiency, prevent the financial risks effectively and improve the financial innovations better (in this chapter, therefore, I will not repeat the analytical method based on the game pattern). This chapter also put forward the functional suppositions of China through the reference to the advanced experience of the western developed countries: The State Department should set up Financial Supervision and Coordination Committee which supervises the operation of the financial clique without changing the previous supervision patterns. The individual business of the sub-companies will still be managed by China Banking Regulatory Commission,China Securities Regulatory Commission and China Insurance Regulatory Commission respectively to ensure the continuity and consistency of the supervision.Chapter Five The Game Analysis of the supervision legislation over the multinational banks. In this chapter, I will interpret the global orientation of the Chinese legislation of the bank supervision through the analysis of tendency of supervision legislation in the fields of the advanced multinational banks; point out the reasons for the emergence of the social collective behavior of the multinational banks and the nesting chain structure of the bank run through the game analysis of the emergence and evolution of the tragedy of the commons. Meanwhile I will make a deduction about how to make use of laws to avoid the happening of the tragedy of the commons, that is, to transform the non-cooperative game of the supervision in the host country on the multinational banks into a co-operative game so as to realize the best trust Pareto optimum between the voluntary social responsibility of the multinational bank and the supervision of the host country through the encouraging the compatible effective balance organism.