Research On The Financial Supervision Theory Based On The Changes Of Financial Structure

Today Economic development is connected with financial closely. As the economy develops rapidly in the whole world, financial activities are increasingly widespread to participate in the economic development. Finance has become the core of economic development. However, it also brings financial risk when the financial development plays a role. Since the1990s,there are so many important financial incidents in the international financial market. Financial supervision has become a worldwide topic. Effective finance supervision in a single country is not sufficient to stop financial risk from spreading all over the world. Financial globalization generally requires the globalization of financial supervision. Finance also has an important role in economic globalization. Financial supervision is often changed with the changes of economic development and the financial structure. It is significant to explore the optimum efficiency of financial supervision during changes. Especially to our country, in the period of transition, the study on financial supervision based on the change of financial structure has more practical significance. This dissertation researches on the financial supervision's efficiency and analyzes the optimum path based on the financial structure change.The related study of financial structure has begun since the 1960s, with the increasing complexity of financial instruments and financial institutions. Financial structure is objective structure of the economy, and it is in the various components of the financial system including relative size, relations and the mutual state. The financial structure change is accompanied by the economic and financial development. As Goldsmith saying:"economic development is leading to change for the financial structure. Economic development and financial development are roughly parallel". Thus, the changing financial structure is the inevitable result of economic development. From the financial history of the financial development, the financial structure changes are always from simple to complex and low level to high level.The financial structure changes not only bring the new financial risk but also increase the financial supervision costs, reduce the efficiency of financial supervision and even affect the financial supervision system such as the institutional structure of financial supervision, financial supervision objectives and financial supervision mode etc. The financial structure of the old equilibrium is broken and the new financial structure will be made. To this point, if the old supervision measures are adopted, it will inevitably lead to the failure of financial supervision. For the changes of the financial structure, we should reform corresponding changes to meet new supervision requirements. From financial structure changes of every country in the whole world, it is easy to find that different countries'financial supervision are different for the adjustment path., and different countries'ways of financial supervision are different. Some countries are slow to achieve the progressive approach. Some countries are keen to achieve the shocks of mode. How to build up their own optimum efficiency of financial supervision system? It is another major issue to be solved including China.With Chinese economy's reform and opening, particularly entering into the WTO, the financial industry has been rapidly developed. Financial structure has undergone profound changes such as expanding the scale of financial assets, increasing the number of financial institutions and improving financial market structure. However, Chinese financial structure changes still have brought new challenges. On the one hand, cross-growing business and strictly separating supervision gradually reduce the efficiency of the supervision as the financial business innovation. Vacuum and overlap problems are more prominent. On the other hand, Chinese financial market structures make imbalance. The proportion of indirect finance is high. Direct financing development has been slow, which aggravates the financial supervision risk. How to realize the optimum financial supervision efficiency directly relates to the stability of Chinese financial development. Based on the theories the financial structure changes and financial supervision, the standard and empirical methods are used to research on financial supervision under the financial structure changes. I analyze the mechanism between the financial structure changes and financial supervision. Subsequently, I research on the optimum for the financial supervision effectiveness by the cost-benefit analysis approach. Then, it is proved that the effectiveness of financial supervision is the financial supervision efficiency optimum.Finally, after analyzing the current changes of Chinese financial structure and discussing the Chinese financial changes, I propose the corresponding reform advice. The dissertation research result will provide a brand new idea for Chinese financial supervision.