Research On Banking Regulatory Governance

Due to coexist of government deficiency and market deficiency, theory of governance, which is seen as"the third road"of public sector management, becomes popular from 1990's. Studies on regulatory governance in financial regulatory agency, especially banking regulatory agency,begins from 2002, but there are still few papers on this topic in domestic. The aim of this paper is to assess regulatory governance of our country's banking regulatory agency and to give some suggestions to improve banking regulatory governance based on studies on governance theory, international standards and codes and good practices in other countries.This paper defines the concept of regulatory governance and good regulatory governance of banking regulatory agencies based on general theory of governance and good governance. Four components have been identified as being key factors to good regulatory governance. These include (1)independence from political and industry interference; (2) Accountability; (3) transparency; (4) market discipline. Large amount of theory and empirical analysis support that poor public sector governance and poor banking regulatory governance are contributing factors to financial crises, good regulatory governance and good public sector governance are being recognized as key to the achievement and preservation of financial stability, and they are also necessity for establishing effective banking regulatory system. Based on overview and empirical studies of the concepts and theory, international standards and assessment results, good practices and experiences about the four components of good regulatory governance, this paper draw the conclusion that independence, accountability, transparency and market discipline , these four components taken together, lay the foundations for the practice of good regulatory governance and effective banking regulationAt last, the paper tries to contribute to the assessment of the state and problems of regulatory governance of our country's banking regulatory agency, and provide some recommendation to strength banking regulatory governance in our country. This paper provide valuable insights for analyzing regulatory governance issues through systematic study on this topic, but there are still a lot of topics needed to be analysis in this area in the future.