History Of Financial Regulation And Change

The reform of financial regulation is an organic part of market-oriented transition of Chinese economy. The dissertation presents an overview of the history process and a theoretic analysis of the establishment and adjustment of Chinese financial regulation system under the background of the market-oriented system transition.During Chinese institutional transitions, the administrational power of government plays a crucial role. The characteristics of the transition China has undergone can be concluded as government oriented gradual institutional transform. As a direct way to intervene financial market administrationally, governmental regulation is an important policy tool of the government to push financial reform. However, government regulation is also a measure for the government to seek monopoly rent so as to maximize its own utility. Therefore, during the process of financial reform, the government is confronted with the dilemma between boosting economic efficiency and maximizing monopoly rent in terms of choosing and adjusting financial regulation policies. This dissertation discussed the possibility of the government as a main power to push the market oriented transition forward sustainably, and whether the government, whose main target is to pursue the maximization of its own utility, is able to make happen a legalized regulation system on a market basis.This dissertation builds a government utility function in financial reform regards. A dynamic game model between central government and substrate organizations is built by integrating the government utility function and a reaction function of the substrates. Through the analyses above, the dissertation presents that financial regulation transition is a process that integrating the government utility function with the inner demand of the market gradually, which confirm us with the possibility of transforming the current regulation system further into a legalized one. On the basis of theoretical model analysis, the dissertation goes on to explore the history of financial regulation changes, and devote some own opinions and suggestions of the further transformations the government is yet to undergo.