The Study On China Banking Regulation Objective Realization

With the development requirements of banking supervision theory and practice, the objective of banking supervision has become a significant subject in recent years. However, this subject still stagnates in the stage of concept definition and basic theory analysis as well as it is lack of the roundly and profoundly theory analysis and empirical analysis. On the basis of theoretical analysis and empirical analysis even or the analysis for banking supervision objective implementation degree, it is found that the regulators have the tendency of safeguarding the interests of banking, so that it is become the main reason for regulators also having this tendency. This paper breaks through the previous research thinking in China as well as introduces the regulation theory into the research of banking supervision objective, and then it is made the beneficial exploration at the aspects of theoretical research and empirical analysis. This paper includes four parts:The first part is the preliminary judge for Chinese banking supervision effect. Though the basic source of banking supervision theory, it is believed that the banking regulators should make the achievement of social welfare maximization as the fundamental goal. So this article makes the analysis of Chinese banking supervision objective effect and it is found that the regulators have deviated from the supervision objective of whole social maximization welfare in the practice. Accordingly, it is proved that the banking supervision objective existing the contradiction between theory and reality.The second part is the theoretical analysis of the banking supervision objective. Firstly, it is analyzed the banking supervision objective regulation design and supervision objective location of China and other major developed countries of the world. As a result, it is found that all the countries do not reflect the supervision objective equally in their banking supervision objective design, but make the emphasis at different degrees. According to analysis, it is considered that the developed countries make less emphasis on some supervision objective design, though these counties has already essentially embodied the core idea of banking supervision objective by the effective supplementary of their advanced level of economic development, a sound legal system and financial system. On the basis of analyzing existing literature and banking supervision regulations, this article considered that the fundamental motive of regulators should be to achieve social welfare maximizing which is the ultimate ideal of regulators, so this article will define it as the overall objective of banking supervision. In order to make the effective implementation of overall objective in the banking supervision practice, it is divided into four core factors which are refinement, development, efficiency and fairness these are the specific objectives of banking supervision. Specific objectives must be subject to the overall goal in the implementation process and regulators need to ensure that the implementation of specific objectives should not deviate from the overall objective.The third part is the construction and empirical study for Chinese banking supervision objective realization and evaluation system. According to the specific objectives decomposition elements of stability, development, efficiency and fairness, it is designed the basic indexes and the index system of Chinese banking supervision objectives realization degree. It is made the subjective empowerment on the criteria layer of this index system by experts scoring and made the objective empowerment on other three supervision objectives by factor analysis method. Because of the lack of data in individual years, fairness objective is made the objective empowerment by the method of standard deviation. Finally, it is formed the trends of realization degree of banking supervision objective during this study period. Examining the theoretical and practical contradictions existed in banking supervision objectives by the analysis of supervision objectives realization degree, it is concluded that Chinese banking supervision regulators have the tendency of protecting banking benefits in order to ensure the preserving and increasing the value of state-owned banking sector assets. As a result, it is led to the practice of banking supervision deviated from the overall objective and this is become the root reason of causing the contradictions between theory and practice in banking supervision objectives.The fourth part is reflection and policy recommendations for Chinese banking supervision objective. It is made that the regulators should be to correct the existing regulatory orientation, especially make the emphasis on the regulation objectives of development and fairness. At the same time, it is continually strengthen the regulation objectives of stability and efficiency. Also, it is promoted the effective implementation of banking supervision objectives according to the overall objective of protecting and enhancing public interest.The innovative points of this paper are those that, firstly, it is deeply analyzed the realization of banking supervision practice for banking supervision objectives from the perspective of social welfare, so it is found that the banking regulators do not according to the provided objectives to protect and promote the public interest. As a result, it is deviated from the objective of maximizing the social welfare and the banking regulation objectives are existed the contradictions between theory and reality. Secondly, this paper established the system of banking supervision objective realization which is made the empirical analysis and it is found that the changing trends of banking supervision objective realization degree in performances of those: It was decreased slightly during the period 1998 to 1999. The period the trend of 1999 to 2004 was increasing rapidly. The realization degree of 2004 to 2006 was reducing gradually. During 2006 to 2007 it is increasing continuously. Thirdly, with deep analysis of banking supervision objectives realization results, it is concluded that Chinese banking supervision regulators have the tendency of protecting banking benefits in order to ensure the preserving and increasing the value of state-owned banking sector assets. As a result, it is led to the practice of banking supervision deviated from the overall objective and this is become the root reason of causing the contradictions between theory and practice in banking supervision objectives.This dissertation belongs to theoretical explorative research which combines regulation economics with industrial economics and banking regulation. It makes a beneficial exploration and practice in the studying of banking regulation efficiency. However, it still has some disadvantages which are that: Firstly, remaining to further improve and refine the evaluation system of banking regulation objective realization degree which can not put the entire evaluation index into empirical research due to the objective difficulties in obtaining data. So to a certain extent, defectiveness has been brought to the entire empirical research. Secondly, this dissertation mainly makes the evaluation of banking supervision objective realization as quantitative study rather than qualitative study. Because the qualitative index obtained in the time series is so difficult to show the changes in trend of supervision objective realization degree that it can not be put into empirical research. All of these will remain to be improved in the future. Thirdly, the impact analysis of Banking Supervision to the social welfare is to be further enriched the theoretical basis for improving and perfecting the evaluation technical methods of social welfare loss. With the limitations of existed theories and technologies, this article has chosen to approximately estimate the impact of social welfare losses led by banking supervision in the use of social welfare losses caused by economic price regulation. This is the most reasonable research method under the objective limited conditions though it has one-sidedness. In this paper, it is considered that there are more comprehensive and effective methods of measuring social welfare losses indicators and making empirical analysis with the deep development of banking regulation theory and technology.