A Study On Financial Regulation Policy

Today, the trend of financial services includes deregulation, globalization, securitization, innovation, intense competition, the relationship between government and economy alteration, among these factors, deregulation is a more primary one. Some financial regulation policies succeeded, and others failed. So clearing fundamental theory of financial regulation, construction a weighing frame of regulation policies, and then practically review regulation policy effect on financial institution is significant. This paper includes two parts. The first part involves regulation theories, which comprises the basic economics theories about regulation, the necessity of regulation and its failure, a frame about weighing financial regulation policy. The second part involves positive analysis, which comprises deregulation and financial liberation effect on financial institutions efficiency, china financial reform effect on financial institutions efficiency.Neither type of regulation, either that which imposes restriction and enhances the government's role in monitoring the financial sector or that which removes restrictions and bring financial institutions closer to a market-monitored regulatory environment, has important influence on financial institutions. The policies imposing restrictions can mean substantial regulatory costs for the financial industry. At the same time, the policies removing restrictions may have lead bankers to assume excessive risks, which causes financial distress and disrupts productivity growth. Therefore, expectation that market-oriented financial reform cannot but lead positive income is idealist, gradual and moderate deregulation should be cooperated with indispensable financial supervision.