The Analysis Of The Local Government's Functions In The Financial Regulation

In the process of financial development, how to fully respect the market function, and bring the government functions into full play? Especially in China, with a deepening financial structure and an unbalanced regional financial development, how to exert the financial supervision function of local government which will safeguard regional financial security? It is the subject that will be discussed and researched on in this thesis.Based on the relevant results studied at home and abroad, and by comprehensively use of multidisciplinary methods and achievements of Public Economics, Public Administration and Public Policy, this thesis strives for a breakthrough on the subject of making full use of the role of governmental financial supervision, in order to promote the local financial development and economic growth and other relevant issues in China's financial development process.Through the analysis of the role which local governments played in China regional financial development, financial risk prevention in the aspects of micro and macro policy environment, this thesis discusses the influence of China local governments to the regional finance supervision, and the driving effect played by the government functions on the regional financial development.On the base of formers' theory production, the innovation of this thesis is that a preliminary study on further promoting the local government functions and the regional financial development is made.Only by exerting both the function of market in resource auto-configuration, and government functions especially the financial supervision function of local government for the market failure, it can promote greater financial development, safeguard financial security, and finally realize sound and fast development of the regional economy.In the regard of theories on financial supervision from the view of economics, the central bank independence, commercial bank supervision research, and the transmission of the financial supervision function of government, the preface of this thesis first list some relevant theories about financial supervision, especially the banking supervision.Analysis shows that the banking enterprise in China is the most important access to external finance, so this thesis will adopt the method of combining social investigation and theoretical research to analysis the functions of government in promoting China's financial development, especially the experiences and theoretical framework under which local governments supervise China's banking.The chapter 1, analyzes the functions which are taken by the government in financial development. What gives value to governmental financial supervision is that the incomplete financial markets will affect social resources to achieve the goals of the optimal configuration, whereas the governmental financial supervision can eliminate these negative influences caused by the negative externalities in financial field, asymmetric information, or imperfect competition, and it can also prevent financial risks.This thesis also highlights that because our country is in the economic transitional stage, the government's financial control target is diversified rather than a single market defect.Further analysis shows that features of local government intervention and effective supervision of financial functions include: supervision function, assistance functions, regulatory functions and coordinating functions. In chapter 2, current situation of regional financial in Jilin province are analyzed. Some related situations and data about banking, securities and insurance in Jilin province were collected. Based on this, this thesis make an analysis on the main issues of Jilin financial development and financial supervision which includes unreasonable regional financial structure, rural finance marginalized phenomenon, poor financial ecological environment, unbalanced financing structure, poor quality of listed companies and resource scarcity of backup listed enterprise. Furthermore, the causes of Jilin province regional financial risk include: the limitation of privately financial mode, malicious competition of individual financial institutions, the increase of professionalism and complexity of financial supervision, the lack of detail rules supporting the financial supervision, the small size of regional financial institutions, low capital adequacy ratio, low internal inverse amplification factor, and etc.In chapter 3, some policy suggestions on local government intervention and the regional financial supervision was put forward. This thesis firstly summarized the differences between central and local financial supervision, and then proposed that the function of local government can be reflected more in creating a stable financial environment, accelerating development of local finance, bringing the intermediaries in to full play, strengthening the financial legal environment construction, exploring the reform and development of rural credit cooperatives or such rural financial institutions, strengthening regional credit construction, etc. This thesis also points out the necessity of the supervision and specialization of regional financial supervision, and gives some meaningful proposals to the strategies on regional financial supervision, such as some concrete measures, like supporting of People's Bank of China, the China Banking Regulatory Commission, and the Regulatory Commission.