Personai Financial Information Management:Trade-off Between Finantial Privacy Protection And Financial Transactions

With the development and innovation of financial market, financial services have been influencing people’s lifestyle and habits in a large extent. Nowadays, going to the bank for business and purchase, which including deposit and withdrawal, exchange, paying utilities, financial products, fund investment, savings insurance, and other innovative financial products and financial derivatives etc, has become an essential part of people’life. When financial institutions make business with individuals, they will get information of their clients definitely through collecting, using, storage and processing because of their special subject in financial market. That information they get will be defined as personal financial information in this article, including but not limited to basic personal information, financial transactions and other information of customers. In practice, it was also known as financial privacy. As for the relationship between financial privacy and personal financial information, personal information includes personal financial information, and financial privacy is the core component of personal financial information.In everyday’s life, people often receive telephones with a strong sense of target which pursue them to buy financial products and services. Sometimes these telephones come from the financial institutions. Obviously, the consumers’ information has been disclosed without their guarantee, and this issue has aroused a wide concern by the society. It has been widely considering that financial privacy, which is an important part of personal privacy, should be strictly protected by all the people. In practice, some countries’financial Regulatory agencies have issued a series of regulations to strengthen the protection of people’s financial privacy. However, it was also suggested that modest sharing and disclosure of information is an important means to overcome information asymmetry of financial markets. In the financial markets, disclosure or demise of financial privacy of consumers’is a prerequisite to the establishment of financial contracts. The strict of the privacy protection, the intense the information asymmetry will be, which is not good for the development of the financial markets.This paper will try to discuss how to solve the issue of trade-off between financial privacy protection and financial transactions. We will attempt to study the problems such as the property rights definition of financial privacy, the right system and the macro-impact by rigorous economics tools. We will also summarize the developed countries’financial privacy protection system, and analysis what’s the station about legislation and enforcement of financial privacy in our country. At last, how to establish our country’s financial privacy protection system will be discussed. The main content of this paper is as follows:First,the research status at home and abroad.In this part, we will begin from some basic problems such as how the privacy right comes from and its value, then we will focus our attention on foreign scholars’research findings on the problems of effects of financial privacy share, the relationship between information disclosure system and credit market development, practice of privacy protection legislation. Finally, we will introduce what’s the research of domestic scholars’going on in this field and give it a review, thus a clear research direction can be found at last.Second, describe the basic theory of financial privacy, the right system and the reasons for concern. We can define financial privacy from the standpoint of financial institutions’or the consumer’. Financial privacy information involves a lot, both static and dynamic accumulation. On the aspect of collection, there are many differences in different countries. Between them, the representatives are United States and Britain. Our country’s "Credit Management Act" has defined the scope of financial private information collection from the perspective of administrative regulations. It says that financial privacy right is a bundle which should include the right to control, the right to be informed, the right to amend and the right to clime etc.Third,discuss how to define what property right of financial privacy is from the perspective of Game Theory.It seems clear that the ownership of financial privacy property for it has property’s attribute. However, this is not true. There is not only static information but dynamic information that accumulated constantly of financial privacy, so it is complicated to give it a definition exactly. The results of our study indicate that give financial privacy right to consumers or financial institutions are all not the best choice, it is the share that could bring the maximize welfare to the whole society. Now we can see that financial privacy right has defined from different perspectives because different country has different way of development on their credit system all over the world.Fourth, using, sharing and disclosure of financial privacy.In this part we will discuss the forms that financial privacy can be used. We also analyze how the financial institutions make choose between protection and sharing of financial privacy from the theory of consumer behavior. From above study of this paper we know that we can not discuss protect privacy without disclosure, so how to resolve the conflict between the two in practice is an important problem need to be concerned. In the issue of using and disclosure of financial privacy information, the representative group is financial institutions and the representative business is asset securitization.Fifth,how to design the rules to protect financial privacy property.At beginning of this part, we will reviews the basic rules on property right protection of the law-economics which including property rules, liability rules, non-transferable rules and control rules. Then with compare of the rules, we believe that the property rules and the liability rules are suitable to protect financial privacy property. Finally, we will select some cases to study how the rules we have choose into practice and how to allocate the burden of proving for every parts.Six,research on financial privacy protection and financial market development.The problem studied in this part is very important and also one of the innovation.We will review96countries’financial privacy protection system and compare the differences between them from designing index of financial privacy protection.We conduct a theoretical hypothesis that the better the financial privacy protection is,the higher level of development of credit system.Financial privacy protection is a double-edged sword,so whether consumer credit which is closely related to each of us can be promoted should be taken into our attention. It is also an important factor that needs to be considered on how to improve the financial privacy legislation.In this part, we will use a model to analyze the effects of privacy protection, and collect large amounts of data to make test. The results show that the growth of consumer credit is positively correlated with the level of financial privacy protection. However,a case study of a American scholar made us realize that the absolute protection of privacy right will bring some negative impact as well.Seven,choice of financial privacy regulatory.We made a assumption on what goals our regulators want to achieve for their management on personal finance information.To protect financial privacy and promote the use of financial information are the main two objectives to fulfill when regulators take responsibilities. In this part, we will analyze the decision model privacy regulation by the theory of draw indifference curve, and we will show the behavior of consumers, regulators and financial institutions in the choice of financial privacy protection issues.Based on this, we will give optimal supervision strategy of financial privacy protection.Eight, Review of justice practice and system of foreign financial privacy protection.This section examines the situation of legislation and enforcement on financial privacy protection of U.S., EU, Japan and Switzerland and sums up the common characteristics and influencing factors. Based on this, we will describe the issues of legal system and stakeholder’s responsibilities on privacy financial privacy protection.Nine, current situation and path selection of our country’s financial privacy protection.Beyond the previous research,we will investigate and assess the law system and problems of financial privacy of our country,then give some suggestions to promote it.