Game Analysis On Financial Supervisory Institutions

The financial crisis caused by the U.S. subprime mortgage crisis was another wake-up call to the people, and governments now are aware of the importance of financial supervision.The development of the financial industry plays a very great role on economic development indeed. But at the same time, when we enjoy the abundant achievements that economic development brings us, we should realize the existence of financial risk. According to analysis, the essential reason for this financial crisis is the improper financial supervision, and the imperfect relevant supervisory laws and regulations.This paper describes the financial risks relevant to the financial supervision, knowing the existence of risks of China's industry.Because the financial globalization is becoming more and more spreading and deepening, China's financial industry will face more challenges. So China should establish the relevant financial supervision system to ensure the steady development of China's financial industry.After realizing the risks appears in our country's financial industry, in the research of Chinese finance supervision, we will focus on the external supervision of the supervision department, and should properly consider the influence of other supervision channels. In terms of implementation stage, the external supervision of the supervision department can be divided into three stages:market access, business operation and market quit regulation, correspondingly, the game model on the financial supervision consists of three submodels.Through the analysis of the model, we know that the financial supervision and management of the financial supervision department is indispensable to the financial industry,To a certain extent,the financial supervision department provides guarantee for the effective operation of the financial system.What can be seen from the three models is that,while maintaining the normal operation of the financial system, regulators play game with financial institutions. Both of them choose their best strategy in their separate strategic space to achieve the maximization of utility and to support self needs.Unlike the normal gambling participants, the financial departments are not only the participants in the game process, but also the policymakers of the rule of the game. By putting the effective regulation into practice, while maintaining the stability and development of the financial system, they decrease various risks to the maximum.But the Chinese government should clearly stipulate that the market supervision and management function should be an important independent function in the existing management system.People pay more and more attention to the the way of the market supervision and the micro-regulation.In today's volatile economy,We should realize the importance of market regulation.In the third chapter of this paper,we mentioned that the world's major economies implementation is mixed operation,however,China is still differentiated management,the main reason is the basic situation in China.According to data manifestation,in order to adapt its economy to the international practice,and better learning supervision function in developed countries,in practical work we are in accordance with requirements of supervised regulation.Along with the increase of personal income,banks will contact a lot of personal finance high-end customers, who not only have deposit required, more is how to finance, make oneself of the capital appreciation.So the financial industry should implement mixed-business management to better satisfy the requirements of the development of individual and enterprise.The financial industry's vitality depends on how to innovation.Along with the development of industry,the amount and type of financial products are in constant increase.What's new here is that,now the financial innovation basically involve multiple fields and various institutions must exist in business transactions,therefore the implement of the mixed-business management is the necessary approach to the financial innovation.Because our country executes supervised respectively, financial innovation makes regulatory oversight body appear overlap and loss,and we often this regulatory blind.so,facing these problems,we should adjust our current regulation and processing method,strengthen the supervision of the departments of communications,formulate the corresponding measures and strengthen the ability to find and solve the risk.Establishing and perfecting the market rules,strengthening market supervision and providing a healthy and stable trading environment for the healthy development of the market economy is the primary way to implement market supervision.It also shows that the market supervision function is very important in the market economy in our country.With the financial globalization speeding up,more and more financial institutions to go abroad for business and investment, in order to get more profit.In the world's major economies,they tend to be referenced mixed-business management.Its reason is financial innovation, and various derivatives arise,and it is hard to divide the derivatives category,thus it is also for regulators to make a decision. Therefore the world is to standardize the monitoring.But in China it still executes decentralized management.In the beginning of supervision,This indeed depends on the basic. conditions of China,but with the development of economy,financial internationalization trend makes China has to face the implement of mixed-business management.If China continues to use traditional separated operation,it will seriously affect the regulation efficiency.The financial regulators should look at the big picture,not in the legitimacy of the micro research blindly.We should focus on risk management,strengthen supervision and management ability,then from separate operation to mixed-business management.In additional to that, financial regulators should establish fair market environment,encourage innovation,establish and perfect relevant legal system construction,unification of domestic and foreign financial institutions and finally maintain financial system steady development in health.Therefore, I think the financial supervision institutions should be a mixed strategy selection with market supervision and administrative supervision.