The Research Of Ways Dealing With Financial Crises In The Context Of The RMB Exchange Rate Reform

The occurrence and spread of the financial crisis has a far-reaching impact on economic performance, but the financial crisis could not be absolutely avoided. Especially in the open conditions, the high degree of relevancy of financial systems between countries makes the financial crisis more infective and destructive. Therefore, how to deal with the financial crisis is an important subject for all countries to study. Financial crisis management has the general characteristics of public crisis management, as well as its own characteristics according to its occurrence in the financial field, so response measures should be taken consequently conforming to certain economics laws.Since the reform of the RMB exchange rate formation mechanism in 2005, the flexibility of the RMB exchange rate has been further enhanced, with the domestic financial system being more open. On the other hand, the possibility to encounter financial market fluctuation or financial crisis is on the rise, which put forward higher requirements on financial crisis management as a systematic project management. China has not yet experienced financial crisis in real sense,and the management system to cope with crisis is relatively weak,with less experience to deal with financial crisis. Therefore, it is forward-looking to give a research on the ways dealing with financial crisis in China by using abroad experiences for reference, so that effective response and proper disposal could be carried out if the crisis came.This paper tries to research on the measures and ways to deal with financial crisis in China from the combined perspective of financial crisis characteristics and public crisis management, under the background of the reform of RMB exchange rate forming mechanism. The full text can be divided into three parts.In the first part, it analyzes the characteristics of the financial crisis and financial crisis response, on the basis of related theories of public crisis and financial crisis, and then sums up changes of financial crisis management under the opening conditions. Secondly, it discusses the status quo and existing problems of ways dealing with financial crisis in China, and analyzes the causes. In China, the main body and procedures to deal with financial crisis is separated and lack of systematism. Policy limitations exist in macro policy operation, measures coping with financial institution crisis are still deficient in micro mechanism construction, and cooperation mechanism with neighboring countries in face of financial crisis has not yet been accomplished. These problems arise from their deep-seated theoretic contradiction, i.e. the contradiction between exchange rate stability and monetary policy independence, and there are also causes such as incomplete legislation and inadequate coordination mechanisms.In the third part, taking the experience of capital control in Thailand when facing financial market turmoil and a managed floating exchange rate regime in Singapore for reference, it proposes operational suggestions from three aspects for China to deal with financial crisis actively under the background of the RMB exchange rate formation mechanism reform. First, the crisis management system could be enhanced by establishing sound legal system, leadership structure, response program and consultation mechanism. Secondly, measures dealing with crisis could be improved by coordinating macroeconomic policies, deepening the exchange rate mechanism reform, and strengthening the micro system of crisis management. Thirdly, communication, cooperative and sharing system could be accomplished through the establishment of information sharing mechanism, cooperative supervision mechanism and market communication mechanism.