Bank Regulation And Governance Of The Real Estate Bubble

It is a major issue to control real estate bubble in theoretical circles and a lot of literature shows that asset price bubbles is a major source of economic crisis and financial crisis. The burst of real estate bubble will lead to a systemic financial crisis and economic crisis and the economy would suffer a serious setback, which makes the prevention and control of the real estate bubble extremely important. At present, China is experiencing a very serious crisis of real estate bubbles, which threatens the growth of the economy, therefore, it is extremely necessary to properly deal with the problem of the real estate bubble and takes effective measures to reduce and eliminate the risks.There are many different ways and means to control the real estate bubble; however, based on the close relations between bank credit and real estate bubble, the paper maintains that it's better to govern the real estate bubble through bank regulation. Generally, there is little research on the relation between banking supervision and the governance of real estate bubble and more research focus on credit expansion boosting the real estate bubble. The paper argues that the most powerful constraints of bank credit expansion is from banking supervision. Therefore, the research has considerable theoretical and practical significance. What's more, the study also provides new ideas and approaches to the control of asset price bubbles.The structure of the paper is as follows: The first chapter mainly introduce the background, domestic and foreign research synthesis, research methods and innovations; the second chapter briefly introduce the basic concepts of the bubble and the real estate bubble and the current real estate bubble in China; the third chapter discusses the bank credit and the formation mechanism of the real estate bubble; the fourth chapter discusses the formation mechanism of the real estate bubble in China, explaining the unique relationship between banking supervision and the real estate bubble and also the relationship between house prices and bank credit; the fifth chapter describes the general tools for banking supervision and evaluates the effect to govern real estate bubble of each tool and thus gives specific methods and recommendations to address the issue of real estate bubble; the sixth chapter gives the conclusion of the paper.