Study On Financial Crisis And The Foreign Exchange Rate Regime Reform Of RMB

After the Asian Financial Crisis in 1997, the tremendous effects of devastation and its contagion has made it the focus of economists and governments that how to keep more economy stable and from being faced with financial crisis. And then it's necessary to make study on the origin of crisis and improve the decision-making in future. As an important part of macro economic regime, the choice of foreign exchange rate regime will surely affect one country's financial stability. But just as some economists have said, the influence of foreign exchange rate regime is more complicated than other regimes. So if there is any relation between foreign exchange rate regime and financial crisis, the relation itself should also be very complicated. For all these reasons, making a comprehensive analysis the relation and putting forward some suggestions to the choice of foreign exchange rate regime is of both academic and practical value.This dissertation is centered on the topic of the relation between foreign exchange rate regime and financial crisis and we analyze it from both theoretical and practical perspectives. Firstly we make comments on the famous crisis models, and the discussion about this topic after the Asian crisis. Based on that, we perform an analysis of the way and mechanism of financial crisis under different regimes. We haven't come to a conclusion of regime predilection. Secondly, we put forward a demonstration analysis of the relation between foreign exchange rate regime and the probability, cost and duration of financial crisis. Lastly, we apply the conclusion of this paper to the reform of RMB exchange rate regime, and advance some principles that we must stick to in the reform and the way to the aim.