Research On Valid Financial Supervision Theory, Practice And Policy

Since 1980s, along with the reform of our economy goes more deep and the financial business develops fast, financial risk is exposed continuously, financial supervision is facing heavy and formidable task. Especially after our country joins World Trade Organization, the competition and risk that finance faces will be more outstanding too. So reinforcing financial supervision and keeping away financial risk are being placed in front of financial workers prominently now. This paper is the elementary exploration for perfecting our financial supervision.This paper first make clear the definition of efficacious financial supervision which is a core-concept, think that efficacious financial supervision should include validity and efficiency. Validity points that financial supervision should be right in the position but not offside; efficiency denotes that financial supervision should be in high efficiency.Taking the two levels of efficacious financial supervision to be the main line, this paper expatiates how to realize that financial supervision is in the right position but not offside, and it is in high efficiency. We think that because of the frangibility of the financial system and the influence of finance in public benefit, government must give strict supervision to finance, but the supervision must be moderate, otherwise it will affect validity. To realize high effective financial supervision, we must treat the cost of financial supervision seriously, we fractionize the supervisory cost into three kinds, administrative cost of supervisor, executive cost of people who are supervised, and recessive cost.The United States is on top in practice of modern financial supervision, so most country become following the lead of the American way. Therefore, we review the process of American financial supervision, combine with our experience, and try hard to find out common rules which can redound to realize valid financial supervision. We consider that valid financial supervision has a close correlation with development of finance, running of macro-economy as well as independency of central bank, for achieving valid financial supervision, we must establish a supervisory system which is invigorative and consistent.Finally, basing on the theory of valid financial supervision and the experience of our country and developed countries, combining with our own practice, we give detailed adviceto how to realize valid financial supervision. We think that to realize valid financial supervision, we must constitute venture appraise system for joint-stock commercial bank as soon as possible, and actualize it effectively; establish deposit insurance system ; perfect financial supervision law, ensuing that supervision is lawful; construct valid interior control system and expedite establish and perfect the exposure system of information market.