Building The Flexible And Non-Flexible Capital Theory And Creating More Capital Instruments

The Flexible and Non-flexible Capital Theory is the innovation and development of the traditional capital theories. Principal-agent Theory and the Risk-allocation Principle construct its basis in theory, meanwhile, a great variety of financial instruments in financial market construct its basis in reality. After all, setting up the Flexible and Non-flexible Capital Theory has great important theories and realistic meanings. Under the theory, the capital instruments are divided into the flexible capital instruments and the non-flexible capital instruments. The flexible capital instruments give investors option, so that they can withdraw the stock, redeem from share or convert into another kinds of capital tools. And we create a new capital tool named the Periodical Stock, which belongs to the flexible capital instruments. If the flexible capital instruments can be wildly used in financial market, they will improve the situation that there are not enough capital instruments in our financial market. They will contribute to increase the rate of capital sufficiency and optimize the capital structure in commercial banks. In additional, they will help to optimize the structure of stock market in our country, and create kinds of flexible capital tools that are flexible, and promote stock market in our country to further regular development.