The Study Of Financial Consumer Protection Mechanism Based On The Principal-agent Theory

Financial consumer protection is the new goal of financial regulation after the 2008 financial crisis.Faced with the collapse of public confidence on the financial system and the serious harm to the economy caused by financial market turmoil.Many countries and regions have carried out regulatory reforms regarding to financial consumer protection.However,the establishment of financial consumer protection agencies does not mean that the interests of consumers can be protected from infringement.How to enhance the effectiveness of regulation and supervision on financial consumer protection?That is a very important research topic.Based on the analysis framework of principal-agent theory and the actual situation of China's financial market,the paper discusses the behavior choice and incentive mechanism problems of the participants in the case of information asymmetry.In the study of the relationship between financial consumers and financial institutions,through the multi-agent principal-agent model analysis,the paper found that:in the current background of financial market cooperation,the complexity of financial products,consumer financial knowledge,the seller's own,the ability level of advice,the protection mechanism of financial regulators,the profit margins of sellers,and the way of cooperation of financial institutions,are important indicators that affect the quality on production and sale of financial products.In the social welfare maximization level,if the financial regulate institutions want to guide the financial institutions to consciously improve the quality of products and services,they should consider these indicators in their penalty mechanism,different penalties will lead to "compliance","free rider","adverse selection "," negative incentives " In addition,the paper put forward some valuable advices on how to solve the problem of non-verifiable problems in the principal-agent theory perspective,such an strengthening the consumer education,reversing the program of proof submitting,increasing the ex post punishment mechanism.In the discussion of the relationship between financial institution and its client manager,through the analysis of moral hazard factors,it is found that the salary incentives of financial institutions and consumer protection mechanism directly affect the moral hazard motivation of the client manager.Financial institutions should carefully consider their compensation incentive program,and strengthen the internal consumer protection mechanism,increase the penalties for irregularities to reduce the customer manager's moral hazard motivation.Through the analysis of the classic principal-agent model,it is necessary to make the compliance behavior achieving the incentive effect to make the balance of interest between the financial institution and the client manager,then the system of conformity assessment and the construction of the accountability mechanism is needed.In the relationship between the central government and the financial regulatory agencies,through the multi-tasking principal-agent model analysis,it is found that:First,in the case of information asymmetry,on the influence of the regulatory assessment mechanism,the financial regulatory authorities will continue to strengthen the early allocation of effort on the regulatory objectives.Second,considering the long-term advantage position of prudential supervision,and the authorities'output endowment on prudential supervision,the change of regulatory target weight structure is very slow,only when othe target's output can not cover the consumer protection loses,the focus center will be changed to the consumer protection.Finally,if the regulatory reform can not be achieved,the consumer protection responsibility should be leaned on regulatory agencies who with higher output factors,and the central government should change their assessment expectations,to guide the allocation of effort..Finally,on the basis of the theoretical analysis,this paper systematically summarized the existing financial consumer protection mechanism framework,compared and analyzed the domestic and international punishment mechanism construction,and used the fixed effect and the random effect model to do the measurement test,put forward some suggestions on the legal construction,institution reform,punishment mechanism and corporate culture,to improve the financial consumer protection mechanism.