Research On The Reform Of The Exit Regulation Of Non-bank Financial Institutions In Our Country

Financial regulation, as one of the functions of government economic control, play an important role and draws more and more attention. Countries'salvation and administration on previous financial crisis has fully demonstrated this point. Though we have controversy and criticism on government's ability of macroeconomic regulation, it is undeniable that government rescuing plans and large-scale political measures to revive the economy are still crisis agencies resorts. Therefore, we have basically reached a consensus on the position and function of the government in the economy. Although the government may fail to function, effects of the financial regulatory system and the various policies are not satisfied yet, we still need to use necessary community resources to correct a variety of undesirable phenomena due to market failures.According to different stages, financial regulation is divided into three kinds: pre-Regulation-preventive regulation,in-regulation-business regulation, after-regulation—out of regulation. In the past, we put too much emphasis on the pre-regulatory functions of financial regulation departments and neglect the after-regulatory functions. Thought both the pre-regulation and after-regulation are very important, in a sense, the after-regulation i.e., the status and role of non-bank financial institutions out of regulation are more important. Because non-bank financial institutions out of regulation is the last part of the financial safety net, the misconduct of individual agency will cause "contagion effect", thus, the local crisis will spread to the entire financial system, resulting in a systemic crisis. The results will cause psychological fear of creditors, reduce people's confidence in financial institutions, and drag the economy running. Non-bank financial institutions out of regulation are the embodiment of government micro-economic regulation functions. The purpose is to prevent financial system instability caused by the quit of problematic institutions and to maintain financial stability, thus, to protect effective competition in the financial markets. Financial regulation department under its own principles, take appropriate means to regulate the exit the non-bank financial institutions. According to the laws and regulations, it has right to take the necessary measures of relief and market exit for those standard non-bank financial institutions. The theoretical framework of non-bank financial institutions out of regulation includes three levels:regulatory departments, regulatory systems and laws and regulations. Regulatory departments have powers and responsibilities to handle the problem of non-bank financial institutions. Regulation system includes objectives and principles of regulation, regulatory mechanisms, and regulatory means and so on. Laws and regulations play an important role in the non-bank financial institutions out of regulation, and they are the basis and standards of the regulation. By strengthening and enforcement of legislation, the behavior of those being regulated can effectively be restrained and regulated. Meanwhile, the laws and regulations also play the same role in the behavior department of regulation.China has gradually established a more complete financial system through 30 years of development of reform and opening up. Various non-bank financial institutions are playing more important roles in economic development. However, because of the impact of the traditional planned economy, China's current financial regulatory system remains a "limp" state. On one hand, we put too much emphasis on the entered regulation of financial institutions and set a strict threshold of market access; on the other hand, we haven't set up exit mechanism for financial institutions. We are protected by the national credit, there are more severe the financial industry monopoly, market competition is not enough. Under poor operating conditions, financial institutions can't exit market through normal channels, so this increases the risk of the financial system. Regulatory departments have no appropriate warning mechanism to detect problems in the non-bank financial institutions.In times of crisis, Regulatory departments are often at a loss, and delay time to exit with sequential reports. In addition, being lack of the necessary regulatory mechanisms and measures, regulatory departments can intervene only by administrative means. For the singular goal of "holding stability", in the way of dealing closely, enormous social resources will be used to save non-bank financial institutions regardless of cost, thus causing waste of public resources. The result leads to the public psychological panic and the mistrust of non-bank financial institutions. We believe that the changes of China's financial regulatory system are the process of combining of mandatory system changes and induced institutional changes. Lack of a formal system in which supply and informal institutional change is the crux of the problem slowly. The sticking point lies in the inefficient supply of formal regulation and the slow changes of informal regulation. In the process of evolution of the system, because the objective function of interest groups is not uniform, the exit process of non-bank financial institutions shows the complex situation of intertwined interests and conflict of interest. With economic globalization and increasing financial sector competition, non-bank financial institutions, as the main market microstructure, must experience the survival of the fittest. The appearance of crisis and the bankruptcy would be normal phenomenon. Financial regulatory departments can not give a passive response; they should find an effective way to take the initiative actions. Therefore, to complete the non-bank financial institutions'exit regulation is of great significance for China during the current transitional period.China's reform and opening up 30 years of development, has gradually established a more complete financial system. Various non-bank financial institutions in economic development, playing an increasingly important role. However, the impact of the traditional planned economy current non-bank financial institutions'exit regulation reform in China should be to stabilize financial markets and to protect the legitimate interests of creditors according to the principle of transparent, timely, prudence. Meanwhile, we should take the market as a direction, and should be measured by cost-benefit. First of all, to improve the non-bank financial institutions exit regulation system. We should reform the existing regulatory departments'organizational model and establish a "line 3 will be" as the subject, other competent authorities supplemented by regulatory organization model. People's bank plays a central role in strengthening the regulation. We increase coordination, establish and improve the joint conference system, to achieve information exchange and sharing. Second, to improve the non-bank financial institutions exit regulation system. In accordance with the standard of pre-regulation, in-regulation and after-regulation of standards, the early warning systems should be established, including risk, emergency rescue system for handling mechanism, and non-bank financial institutions exit regulation system. Thirdly, to perfect non-bank financial institutions'exit regulations, to strengthen the intensity in charge of the problem of non-bank financial institutions. Finally, to strengthen regulatory environment and improve governance. from the point of view of the social credit environment and social credit system, we should make efforts to create a harmonious financial environment.