| Not only flexible,effective and appropriate government intervention,but also well-developed self-regulation capability of the market mechanism is important to establish a steady operation of the financial system.The evolution of the Basel system suggested that the supervision of Banks’ risk taking behaviors can be done by market discipline or official supervision alone.The fundamental problem of reform regulation is how to find the optimal combination point between market discipline and official regulation and realize the dynamic balance between them.Due to the financial market environment that banking industry facing had changed the essentially,official forced intervention has already cannot adapt to the new economic environment,it may even be limited bound the development of the banking sector,thus the importance of market restraint mechanism had been found increasingly.Therefore,how to give play to the power of the market to execute effectively supervise and constrain the risk taking behavior of commercial Banks has been a hot issue in the theoretical and practical edge.The purpose of designing the market discipline mechanism is driven by the concern of stakeholders’ interests and restraining Banks through market forces when necessary.Market discipline and minimum capital requirements,supervision are the three pillars of Basel accord,although several adjustments and changes had happen on the Basel agreement,but the pillar position of market discipline has not been the slightest wavering,show that market discipline is very important in the status of banking supervision.With the importance of market constraints in bank regulation,as a result,of the study of market discipline in China started relatively late,and considering different background against foreign system,the domestic research on market discipline is relatively messy and lacked of analyzing the dynamic relationship between the three pillars,considering the implicit insurance system background,and comparison market constraints means,and characteristics of bank is not deeply researched on the mechanism of market discipline。The starting point of this essay is to study the market discipline effect under the background of bank risk taking behavior.The research content of this essay consists of four sections and three perspectives.Firstly,historical evolution and research process of the existence and validity of market discipline are reviewed and analyzed.Secondly,from the perspective of information disclosure,effectiveness of market discipline of bank information disclosure on bank risk-taking behavior as well as the effectiveness and difference of information disclosure and inter bank interest rate as market discipline means are discussed compared in the context of implicit insurance system in our country.Third,this essay emphatically explores the mechanism and effectiveness of the banking market discipline mechanism from the perspective of equity characteristics of commercial Banks,and further introduce aspects of scale and market concentration.Fourth,from the relationship of the inter relationship of three pillars of Basel accord perspective,the essay re-examine the relationship among the three pillars and the location of market discipline in bank risk taking supervision under the background of bank risk exposures,and interpret economic significance of the research conclusion.The main conclusion of this essay shows that the market discipline means.The characteristics of commercial Banks and the relations of the three pillars of Basel all have a significant influence on the effectiveness of market discipline.The main conclusions can be summarized into three aspects: first.Information disclosure plays an important role in exerting the market discipline effect on Banks’ risk taking behaviors.However,market conditions need to be completely taken into account and adapt to local conditions.To be specific,even considering the government’s implicit insurance system,improving the level of information disclosure is still conducive to lower the risk of Banks.The effectiveness of information disclosure on market discipline runs better under the condition of high market concentration,while the market discipline effectiveness of inter-bank deposits plays better under the condition of low market concentration.Second,the bank’s characteristics play a significant role in the relationship between the effectiveness of market discipline and the bank’s risk taking behavior.Specifically,the shareholding ratio is negatively correlated with the risk taking when the shares of the largest shareholder in a joint-stock commercial bank increase,showing a stronger function of market discipline.However,the implicit deposit insurance system in China’s banking industry has weakened the market discipline effect of bank deposits on risk-taking behaviors.At the same time,the bank size and the market validity constraint appeared nonlinear relationship.The larger the size of the bank is,the more difficult to rescue banks,namely "too big to fail" and "too big to save",the rescue difficult positively related to the of the scale of commercial banks.Third,in considering the relationship of the three pillars of Basel,although the market discipline can reduce bank failure threshold,but regulators should according to the information disclosure of Banks after the screening of targeted monitoring,at the same time the capital requirements as a bank failure point of view,rather than indirect signal asset reset.In conclusion,this essay uses the model and empirical methods,following the basic thought of the problem from the status,question and theory,the evolution process of market discipline and research present situation analysis,proposed in this essay,the research Perspective of view,content and methods,and put forward relevant countermeasures and Suggestions based on the research conclusion.In this essay,the main conclusions enrich the theory and empirical evidence of market discipline,it is helpful to rethink the effectiveness of market discipline for the adjustment and reform of China’s financial system,it has theoretical and practical significance. |
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