Research On The Relationship Between Financial Safety And Capital Flow In The Financial Capital Globalization

In face of the challenges of the quicker paces in the financial capital globalization and the opening process of China's financial market after the entry into WTO, China should attach great importance to the problem of financial safety. But there isn't a systemic analysis in the existing literature on the subject. This paper from the view of financial capital globalization, studies on the effects of financial capital flow, the relationship between capital flow and financial crisis, the choice of regulation or deregulation and the problem of China's financial safety.Firstly, this paper discusses the conceptions of economic globalization, financial globalization and financial capital globalization and based on the existing capital flowing theories and financial theories, sets up an academic framework for further study. Secondly, this paper applies a representativenew currency crisis model------C-P-R Model to analyze the effects ofcapital controls. Thirdly, this paper establishes a 3-period small opening economic model and utilizes the game theory to make further research on it. Then, this paper compares the measures to control capital flow and concludes that indirect controls are better than direct controls. At last, this paper analyzes the capital flowing risks in China and makes important suggestions for policy-making, especially that the opening process of capital account should be in proper sequences.