The Study Of Market Withdrawal Of Financial Institution

Along with the financial globalization, the world financial system is getting more and more closer.2008American sub crisis as well as2009Greece debt crisis caused the risks faced by financial institutions in various countries even more concentrate. In the crisis, large quantities of question financial institutions exposed which caused people to take it seriously. At the same time, financial industry in our country has been gradually opening to the outside world and large quantities of middle and small scale financial institutions have been established, which facilitated the steep competition in the financial institutions, thus the country has been unable to keep using the administrative rescue method to protect the entire money market. Therefore, the chief purpose of this article comes to how to promote financial institutions in our country to deal with the risk effectively, and guarantee the financial institution market withdrawal mechanism promoting financial system’s healthy development, then promote strengthing financial institution in our country.This article first introduced the present situation of financial institution market withdrawal in our country. Through the theoretical and practical analysis we found that, financial institution market withdrawal must be handled carefully because of the nature of fragility. Most case of financial institution withdrawal happened in high risky periods of financial system, and in that time the negative impacts of financial institution withdrawal to the economy are serious. The main problems in our country now are:market imperfections, lack of related index system to monitor the overall financial system; lack of early warning mechanism for financial risks and crisis agencies dispose mechanism; lack of systemic legal institutions. So the main body of our article system analyses financial institution market exit mechanism from three aspects:intrinsic factor, micro risk early warning mechanism and legal institution.Firstly, we empirically analysed financial institution market withdrawal intrinsic factor and macroscopic environment from bank system fragility angle. When financial system fragility rise, the degree and the influence of financial institution market exit can increase. We first carries on the synthesis measure using the quota and the qualitative analysis union method to Our country Bank system fragility, the research indicated as follows:At present, financial institution market exit in our country exists certain negative social impact, the existing financial organ withdrawal way lacks the accurate localizationand has a very limitation. The empirical analysis indicated that financial organ fragility has complex relations with many kinds of different economic indicators;Six indicators as inflation rate, the year credit volume and the GDP ratio, the M2rate of increment, the loan rate of increment, one year time deposit interest rate, saves to the loan exists long-term balanced relations with the bank system vulnerable condition; The feedback effect of bank system fragility to the monetary policy and the credit policy is obvious; The credit risk factor’s explaning dynamics to the bank system fragility is strong; The macro economic foundation is not a primary factor affects the banks’fragility.Secondly, we mainly analysed the risk early warning mechanism before single financial organs’withdrawal from the microscopic angle. Our analysis included normal risk warning and bankruptcy risk warning mechanism. The normal risk warning mechanism could reduce the probability of financial institution withdrawal, and keep it stable; the bankruptcy risk warning mechanism could ruduce the negative impact of financial institution withdrawal, and keep the financial system stability. When anslysed the bankruptcy risk warning mechanism, We constructed the stochastic interest rate based financial institution bankruptcy early warning mathematical model on reference of bankruptcy theory, the stochastic interest rate model and the VAR model, the model explained that the financial institutions carries on the bankrupt early warning using VAR model of bankrupt time, the bankrupt degree and the bankrupt earnings; enhancing company’s financing ability, cutting the financing interest rate as well as raising the fund sufficient level, thus reducing its transition probability matrix could cut the ruin probability effectively, and prevent bankruptcy risk.Thirdly, we analysed decision-making process and legal protection of financial institution market withdrawal. Decision-making is a rigorous process of work, it must follow a mture principle, and need certain basis and supports, then could withdrawal in its best way at the right time through appropriate platform. When analysed legal protection, we first introduced present law of financial institution market withdrawal, then we discussed the feasible legal steps from three aspects of the creditor’s rights confirmation, repay principle and the settlement laws and regulations, thus carried on the selective analysis on bankrupt case of Hengxin securities company, which proposed the ponder of suitable law on security companies’bankruptcy. The research indicated that although the legal framework of financial institution market exist has built in our country, but is not perfect, and lack the special financial institution market exist law to systematic it. Finally, we proposed four policy recommendations on prevent negative impact of financial institution withdrawal, including complete the financial institutions withdrawal risk pre-warning mechanism, strengthening the financial supervision, establishing the financial control rallying system and the final lender rescuing system is the safeguard to maintain the financial institutions’ orderly movement as well as the safe exist.