Research On The Optimized Path Of Financial Supervision Framework In China

Throughout the history of economic theories,we can see that there is an old relationship hidden inside the evolution of economic schools: government and market.The government and the market have their own advantages and disadvantages.How to deal with the relationship between the government and the market has always been the focus of debating among economists.Practice has proved that government and market are indispensable for economic development.Financial supervision is a kind of behavior of government intervention in financial activities.Like commodity market failures,financial market is more fragile and will fail.Therefore,financial supervision is necessary.Financial regulation is also presenting an ancient relationship: efficiency and stability.Is it pursuing financial efficiency or paying attention to financial stability? The changing history of international financial supervision system is the process of constantly balancing the relationship between financial efficiency and financial stability.In this process,the financial supervisory framework is also constantly adjusting.The framework of financial supervision is the “skeleton” of financial supervision and the fundamental factor that determines the way and the effects of financial supervision.The changes in the financial market environment and the adjustment of the regulatory requirements affect the changes of the financial supervisory framework.In 2008,the international financial crisis has brought great damages to the economic and financial development of many countries.After the crisis,these countries began to reflect on the regulatory issues hiding behind the financial crisis,and began to reform or improve the financial supervisory framework.China has also begun to improve the financial supervision framework from then on.In 2013,the State Council set up a joint ministerial meeting.At the end of 2015,the people's Bank of China announced the establishment of a Macro Prudential Assessment(MPA),but the financial supervisory framework of China has not been greatly adjusted until the end of 2017.Since 2012,China's financial policy has relatively loosed in order to better meet the needs of financial development.Financial operation mode began to transform into mixed operation.Innovative financial products developed rapidly,and the number of Internet financial companies increased dramatically.At the same time,the financial industry was flourishing,and the abnormal volatility of the stock market,the risk management and the management of chaos were constantly emerging.In October,2015,the general secretary Xi Jinping pointed out that “the recent frequent local risks,especially the violent fluctuations in the recent capital market,showed that the current supervisory framework had an institutional contradiction that did not adapt to the development of China's financial industry of china.”As far as the problem of financial supervision is concerned,the reason for the continuous emergence of the financial risk points lies in the fact that the financial supervisory framework of our country is not matched with the financial development,the requirements of actual supervision and the tendency of the development of international financial supervision.The report of the nineteenth National Congress of the Communist Party of China indicates that socialism with Chinese characteristics has entered a new era.After this time,the State Council financial stability and Development Committee was formally established,indicating that China's financial supervisory framework has also entered a new era of reform.In March,2018,the China Banking Regulatory Commission(CBRC)and the China Insurance Regulatory Commission(CIRC)were merged into China Banking and Insurance Regulatory Commission(CBIRC),and the 16-year “one bank three commission” supervisory framework was announced to an end.This is the first major adjustment of China's financial supervisory framework in the past 16 years,but that does not mean the completion of the financial supervisory framework reform.On the contrary,this paper argues that this is the beginning of China's financial supervisory framework reform in the new era.Then,how to optimize the financial supervisory framework?“Learning from the past helps to better predict the future.” This paper reviews in detail the historical evolution of China's financial supervision framework and the reform practices of international financial supervision framework in the post-crisis era.By longitudinal historical analysis,this paper divides the historical evolution of China's financial supervision framework into five stages since 1948,and summarizes the four common features of the regulatory transformations.By vertical history comparison,this paper compares the reform practice of the financial supervision framework of the typical developed countries and emerging market countries in the post-crisis era and summarizes the reform experiences.In the study of the status quo of China's financial supervision framework,the paper adopts a result-oriented research approach.It first summarizes the risks of China's financial in recent years and analyzes the underlying causes of these risks and comes up with the existing problems in China's financial supervision framework.Based on the practical experiences of financial supervision reform at domestic and foreign markets,this paper proposed five principles that need to be adhered in the future to improve China's financial supervision framework.The paper also lists the possible reform paths for optimizing China's financial regulation based on the existing regulatory framework.The paper then adopts a two-step screening mechanism to justify each possible reform path,and then selects the optimized path of financial supervision framework.The optimized path of financial supervision framework need to be proceeded by a step-by-step manner.Therefore,this paper proposes a “three-step” approach to optimize China's financial supervision framework in the new era.The first step is to forge “one board,one central bank,two commission” regulatory framework,which has already completed.The second step is a transitional stage to establish a framework of “one board,one central bank,two commission and one agency”.The final step is to establish a “one board,one central bank,two peaks” regulatory framework.