Institutional Change From The Perspective Of China's Rural Financial Risk Research

Rural finance is the core of the rural economy, and plays a pivotal role in the rural economic development. At the same time, as a high risk sector, the rural financial system has a natural vulnerability. The accumulation of financial risks can easily lead to financial instability in rural areas, destruction of rural economy and social stability. In particular, in today's global economy and financial integration, rural finance is influenced easily by the international financial crisis. The rural financial security issue has become the focus of common concern. "System is an important" has become consensus. How to build a more cost-effective financial system, to control the occurrence of financial risk for rural areas, and to ensure rural financial healthy development in the process of the rural financial system change, has caused great attention by China's financial sector and theorists.Transaction cost theory, property right theory, institutional change theory and other modern economic and financial theories and methods are used in the paper, to analyze changes in China's rural financial system and the internal mechanism.From the course of changes in China's rural finance, the unified financial system existed before the reform and opening of China, while the state allocated the financial resources, mainly through administrative directives. And there is no modern sense rural financial system. Since the reform and opening, China had market-oriented reform in the financial system, and China's rural finance changes gradually from the beginning of the unitary transformation to pluralism. From the characteristics of changes, changes in China's rural financial system process with government-led, progressive features. At the same time, changes in China's rural financial system also has the over administrative intervention and rent seeking, lack of independence of the rural financial institutions, market access, excessive restrictions and many other system oversupply problems, while there are also financial products, deposit insurance system, information disclosure and system of financial legislation, the supply shortage.When the institutional change in rural areas proceeds, rural financial risk is also an evolving process. Changes in the rural financial system have different periods, while the risk of rural finance system has different characteristics. Approach is self-serving interests, and interest groups in the course of the different interests of the game are bound to create institutional change in the system flaws and imperfections. The new system's shortcomings and deficiencies will be the ways interests of stakeholders seek to game, increasing the system's risks. Environment,as an important factor affecting institutional change, also influence the changes in rural financial risks, including risks such as the type and severity.On the basis of theory analization and history analization, then change-risk model of China's rural financial system is built on this basis. That China's rural financial risk in the context of the system performance reflect the interests game among the central government, local governments, farmers and other rural financial institutions. System risk closely linked with institutional change, with the characteristics of path dependence. And to guard against financial risks, we must improve the rural financial system, and behavior of stakeholders which is the key to the game.United States, Japan and other countries have the system of rural financial risks which provides a very useful inspiration and Experience to China's rural financial risk prevention. It mainly reflects in the establishment of a complete rural financial system, strengthening financial supervision in rural areas, improving rural financial services, and attaching importance to the legal system of financial regulation and so on.Institutional Change and the system risk interact with each other. Changes in the financial system will lead to the further evolution of the rural financial risks. This also determines China's rural financial risk prevention is a long process, especially in market conditions, the various interest groups are trying to find self-interest maximization. Therefore, the system change from the perspective of the rural financial risks has a long way to go. On the one hand, China needs to gradually reform and improve the rural financial system to make it to meet the needs of economic and social development, while able to maintain healthy and sustainable rural finance development. On the other hand, regulate and restrain the behavior of all stakeholders, the concept of sustainable development, and improve the sense of risk prevention. Finally, optimize the financial environment in rural areas, including rural credit system construction, the gradual elimination of urban-rural gap, vigorously develop the "three rural" and so on.