The Study Of The Effective Supervision Of International Hot Money Flows

After the collapse of the Bretton Woods system in the 1970 s,one of the most important features about the international economic development is financial turmoil.In 2007 the Subprime Lending Crisis quickly evolved into the global economic crisis.But after the Subprime Lending Crisis,because the recovery of global economy is weak,the confidence of the International Hot Money to the new developing markets is decreasing,and it rapidly runs out of the new developing markets,which led to the currency depreciation in Brazil,Thailand,South Korea and other countries in the second half of 2011.In May 2013,the federal reserve chairman hinted that QE would quit,which immediately caused the economy fall in the most vulnerable countries such as India and South Africa.The financial crisis was plunged into the third layer.Since then,under the influence of the exit of QE and the raise and the expected raise of interest rates,the global financial crisis intensified,from the Russian Ruble crisis by the end of 2014,to "August 11th" China Yuan depreciation storm in 2015,and the Republic of Kazakhstan Tenge devaluation,then the overnight fall of Argentine pesos and Azerbaijan manat,followed by the Venezuela economic crisis.Since 1970 s,the history of international financial crisis shows that the vagaries of expected changes and investors "cattle copycat behavior",are direct causes of the international financial turmoil,and the main driving force is the impact caused by International Hot Money.It implies that without the internationalization of hot money flows,there would be no shock about the international financial turmoil of the governments and the financial regulators today.International Hot Money is a kind of typical speculative capital,which is rooted in the external expansion of capitalism.The instability of the international monetary system and the development of financial innovation stimulate the rapid expansion of the International Hot Money,while the development of electronic information technology and financial liberalization not only creates a good environment for mass rapid flow of international capital,but also provides the international hot money chances of speculating profits.Since 1980 s most frequent financial crises are triggered directly by international speculative hot money,and the frequent outbreak of the financial crisis inspires the great interest of the national scholars and policy makers in the impact of the international speculative hot money.Many scholars of international speculative hot money have carried on the pertinent analysis of impact causes,time,and quantity and so on,among which the most influential theory is the Three generations of Currency Crisis Model Theory.In this dissertation we can also analyze the speculation mechanism of the international hot money with this theory.With the further development of economic globalization and world economic integration,the economic ties between the countries all over the world are increasingly close,and interdependence degree also gradually increases,so the International Hot Money flow is having more and more effects on all countries.At the same time,with the improvement of International Hot Money flowing scale and flowing frequency,the policy spillover effect of monitoring and managing International Hot Money flow is becoming more and more obvious,which accelerates the infection of the crisis and spreading,and so it is necessary to strengthen the coordination and cooperation of the International Supervision of Hot Money flow.By using the "regulatory externality model" of Giovanni Dell Ariccia and Robert Marquezin to strengthen the Supervision of international hot money flows is a necessity,and the closer economic ties,the higher the degree of financial globalization,the more necessary coordination and cooperation of the Supervision of international hot money flows.The flow Supervision can be divided into domestic regulation,international bilateral coordination and cooperation,international regional coordination and cooperation in regulation,and global coordination and cooperation in regulation.Among them,the national Supervisions the foundation of International Hot Money flow,and the bilateral coordination and cooperation regulation is the most basic,the most common,the most effective way of supervision,while regional coordination and cooperation is a suboptimal choice of the coordination and cooperation of international hot money flow,but on the long term global coordination and cooperation of international hot money flow monitoring will be a developing trend.In terms of domestic regulations,the main western countries and some developing countries have a lot of experiences and lessons of monitoring International Hot Money.International Hot Money has impact on economy of a country in the micro and macro aspects,which was quite obvious in the previous financial crisis in 1970 s,and it also took place in China in 2015.Therefore the domestic monitoring of International Hot Money flows should be regulated from both macro and micro aspects.Zhou Xiaochuan says the domestic regulatory system to monitor the International Hot Money flows should be that of "macro-prudential and micro-prudential complement,and the coordination of monetary policy and the prudent management ".As long as the both sides of coordination and cooperation have good political and diplomatic relations,the high frequency of economic exchanges and trade,the homogeneity or complement of economy,and the mutual understanding of the related legal system and regulatory model,the two sides then can carry out good bilateral coordination and cooperation of International Hot Money flow regulation.Many cases of current bilateral coordination and cooperation are through the judiciary assistance agreement and memorandum of understanding.With the integration of regional economic development being one of the major features of the current world economic development,the impact of International Hot Money speculation and financial crises also tend to have regional and invasive characteristics.Therefore,regional financial supervision,coordination and cooperation has been paid more and more attention by the international society,for strengthening the supervision of International Hot Money flows of regional coordination and cooperation is conducive to the stable development of the regional economy and society,and is advantageous to the defense and prevention of financial crisis spreading.The global coordinative and cooperative regulation of International Hot Money flow has made many achievements,but because the United States is the main supplying country of International Hot Money,and while a major feature of the current international financial system is that the United States,as the dominant financial hegemony country,controls almost all the important international financial institutions,it has become more and more difficult to regulate the current international hot money flows.However in the long term,coordination and cooperation will still be the main trend of global regulation in the International Hot Money.Now it is a key period of reforming international financial regulation,the existing international financial regulatory framework will face a major adjustment.China,as the largest emerging economy,should be in the accurate position and take a positive response in the game of this fierce financial competition,and participate or even dominate global coordination and cooperation of International hot Money Supervision through the G20 platform.China can re-examine the advantages of its own and the disadvantages of foreign countries,and taking it as a breakthrough,China can gain experiences on the issues of the regulation establishment,standards and implementation principles and then strive to become the promoter and leader in the International Hot Money flow regulation.After the reform of RMB exchange rate system in July 2005,Flow into and out of the International Hot Money continued to rise in the speed and scale of the Chinese market.The large-scale flow and speculation of international hot money has become the major concern of China's economic development,and brought huge risk in the stable development of Chinese economy.We know that in 2005-2011,large-scale international capital flowed into China,and in 2012,2014 and 2015,the International Hot Money massively evacuated China,especially in 2015 the withdrawal of Chinese International Hot Money reduced by more than $450 billion in foreign exchange reserves,which resulted in the falling-down of both Chinese stock markets and currency markets.It shows that the Chinese stock market,currency and real estate markets have become the main venues of International Hot Money speculation--"bet" and "carry".But China's current supervision about International Hot Money flows is lagging behind and lack of Supervision strength and the regulatory system is not perfect.Therefore,China should carefully open the capital account,steadily push RMB into internationalization,establish and improve risk monitoring system of International Hot Honey flows,supervise the coordination and cooperation of International Hot Honey flows,so as to further strengthen the Supervision of International Hot Money flows in China,and to prevent the shock of international hot money speculation.