Study On Problems And Countermeasures Of Bank Capital Flowing Into The Stock Market

The paper is focused on the problem of bank capital flowing into stock market. As one of the focus of public concern, the flow of bank capital into stock market recent years has greatly influenced the economy and finance of china Under the guide of basic theory and international practice, combining the analysis on the process of bank capital flowing into stock market in our country, the thesis probes into the problems, influences, causes and restrictions from the perspective of researches and practices. In order to regularize the inflow channels and explore ways of bank capital getting into stock market, a general principle is proposed and some policy suggestions are put forward.As revealed by the study, following problems exist: 1) the supply of bank capital has a close relation with the fluctuation of stock market; 2) the volume of bank capital flowing into stock market is large and it is estimated that there are 450-600 billion of bank capital exist on stock market, 2/3 of which are illegal; 3) most bank capital are getting into stock market through illegal channels, such as illegal repurchase of government securities, illegal acceptance and discount of trade bill, embezzlement of customers' guarantee deposit, illegal interbank loan, illegal diversion of credit capital to other purpose, etc.The inflow of bank capital to stock market has dual influences on our economy and finance. 1) If bank capital are forbidden thoroughly to get into stock market, it will bring low profit on monetary market, constrict the development of capital market and affect the transmission of monetary policy; 2) vice versa, allowing bank capital to flow into stock market too early may also lead to unfavorable effects, such as endangering financial stability, disturbing financial order and constraining the development of economy.The cause may be explained as follows: excessive highness of stock market returns, low earning level of commercial banks, the difficulty of operation of security companies and the simplicity of financial investment instrument. Many restrictions still exit when allowing more bank capital to flow into stock market.For introducing bank capital rationally into stock market, a general principle must be obeyed--connecting monetary market and capital market effectively. We should attach more importanceto following channels at present time: broaden monetary market function; perfect stock mortgage loan; develop investment institute; explore investment banking business, including investment funds business channel, insurance business channel and security business channel; make financial organization renovation. Following policy suggestions should be applied: 1) perfect the policy environment; 2) treat the problem rationally; 3) implement financial mixed operation system in due time; 4) foster financial market; 5) enhance external supervision; 6) deepen the construction of commercial banks; 7) introduce bank capital into stock market in stages.