Financial Liberalization, Financial Supervision And Financial Development

As financial liberalization was carrying out and deepening in the world, financial crises took place in succession. Financial supervisors in more and more countries recognized that prudent financial supervision played a significant role in financial liberalization.We make use of economical and financial theory, establish a new concept of financial liberalization's net effect, describe the evolvement of financial liberalization, financial supervision and financial development from 1975 to 2002 in Taiwan by econometrics methodology, and found there is dynamic and balanceable relationship among financial liberalization, financial supervision and financial development.We explain core concepts of financial liberalization's net effect, financial liberalization, financial supervision and financial development, and then found financial liberalization index, financial supervision index and financial development index by principal component analysis. Firstly, we generalize and summarize financial liberalization from 1975 to 2002 in Taiwan. Secondly, we analyze the relationship among the three and then explain the role of financial crises. In the end, we put forward the revelation of financial liberalization in Taiwan.