Research On Government Regulators Improve Banking Market Discipline

Since the birth of the bank,there has been a battle between the government and the market in banking regulation.Until 2004,when in fact the international standard setters of bank regulation field,the Basel committee revised and perfected the new Basel capital accord on the basis of the 1988 Basel capital accord,the dispute ended.The core spirit of Basel new capital accord is to put forward the three pillars of minimum capital requirements,supervision and market discipline.The first pillar minimum capital requirements and the second pillar supervision jointly constitute the core content of government regulation.Together with the third pillar market discipline,it becomes the external regulation force of the bank.The external regulation force of the bank and the internal control system of the bank constitute the modern banking regulation system.The evolution process in academia showed the same trajectory,from the Market Failure Theory,the Government Regulation Theory,the Regulation Failure Theory to the Market Promotion Theory,the final foothold is the market and the government is not an either/or but a complementary relationship.Governments around the world want to adopt the new Basel capital accord requirements,combining government regulation and market discipline,mainly market discipline,government regulation is complementary,the two complement each other,build up modern banking regulation system.This paper acknowledges the views of the Basel committee and Basel II on the modern banking regulation system.Therefore,for the government regulatory authorities in China's banking industry,in the international regulatory standards within a prescribed time limit,how to build market discipline as the main force of modern banking regulation system is imminent.At the G20 Cannes summit in November 2011,leaders pledged to implement Basel II regulation standards by January 1,2013,and to reach the full target by 2019.On this basis,China's banking regulation core government departments,the China Banking Regulatory Commission(CBRC)combining the reality of domestic banking industry,integration of the Basel II and the Basel III's regulation requirements,issued " Guidelines on the implementation of new regulatory standards in China's banking sector".Based on this reality,this paper studies the problem of improving market discipline of Chinese government regulators.Research framework closely follows what are government regulators to improve market discipline? Why should government regulators improve market discipline? How do government regulators improve market discipline?Firstly,this article has to answer "what is it".This article not only gives "the government regulators to perfect the market discipline" a clear explanation,but also gives the concept "market discipline","government regulators","commercial Banks" a clear definition.Then,this paper establishes the analysis system of the market discipline of government regulators,analyzes the elements in this system,points out that the main body of the perfect market discipline are the PBOC,the CBRC,the CSRC and so on;the object of perfect market discipline is commercial bank;the main means of improving market discipline are legal means,economic means and administrative means;the principle of improving market discipline should abide by the law,independence,unity and moderation;the function and significance to perfect the market discipline is to improve the commercial bank risk management ability,management efficiency and global competition ability,to strengthen the commercial Banks internal control and improve the modern bank regulation system and so on.Secondly,this article has to answer "why".Theoretically,the Market Failure Theory,the Government Regulation Theory,the Regulation Failure Theory and the Market Promotion Theory provide theoretical basis for government regulators to perfect market discipline.In practice,it is necessary to improve the effectiveness of government regulation and market discipline in China's banking industry.In this part,this paper makes an empirical evaluation on the regulation effectiveness of Chinese banking government according to the cost-benefit analysis method of government regulation.The conclusion is that the government regulation of China's banking industry is effective,but due to the high cost of regulation,the effectiveness needs to be improved.Then,this paper selects 10 commercial Banks with the largest assets in China as sample Banks,makes an empirical test on the market discipline effectiveness of China's commercial Banks based on the sample bank's latest data from the 2008 financial crisis to 2016 and the classical model of Demiguic-Kunt and Huizinga(2004).The conclusion is that the market discipline effect of commercial Banks in China is weak.Moreover,in this part this paper expounds and analyzes the current situation of market discipline of Chinese government regulators,mainly deals with the measures that the government regulators have taken to improve the market discipline,the effect of receiving,the inadequacy of the existence and the reasons for the formation of the dilemma.The conclusion of the empirical analysis is further supported by this conclusion.Therefore,it solves the problem why government regulators should perfect the market discipline.Finally,this article has to answer "how to do".In this part,through selecting developed country The United States whose banking industry is most advanced and matured,developing country Argentina whose banking industry is very healthy and stable,as well as New Zealand who firstly fully takes market discipline as the main strength of banking regulation for observation and analysis,founded that the basic regulation measures taken by these countries are included in the five basic conditions summed up by academic circle,namely,corporate governance,information disclosure of commercial banks,the third party supervision system,the bank safety net,market exit mechanism.Thus,according to the concrete practice of our country,this part proposes to perfect the corporate governance of commercial bank,to set up the mandatory information disclosure mechanism,to develop commercial credit rating,to reconstruct the bank safety net,to set up market exit mechanism of problem banks.