A Study On The Government Salvation And Regulation Effectiveness

Since the subprime crisis originated from the United States in 2007 sweeping the globe, the words"Government Salvation"or"Government Rescues"got more and more concerns of people. On the one hand, many large financial institutions plunged into the crisis, the stability of the financial market and the development of the economic society have been seriously affected, and the government was forced to help out the financial institutions in trouble with taxpayers'money; on the other hand, government's help to the financial institutions in trouble damages the reputation of the government as the market supervisor which increase the potential risk of moral hazard and leads to the loss of social wealth and the regulatory inefficiency.This dissertation attempts to research the influence of government rescue to the regulator's reputation, then the impact to the behavior of those under supervision, and eventually the influence to the regulatory efficiency. Through the study of different countries'empirical data and case, the ultimate aim of this dissertation is to look for ways of improve the regulatory efficiency of China.The entire dissertation is divided into five chapters. Chapter one is the introduction including the review of domestic and foreign literature of government's rescue, reputation of regulators and the effectiveness of regulation, research contents, method and the potential innovation and problems.Chapter two establishes a model of government's rescue, reputation of regulators and the effectiveness of regulation. Through constructing a game model under the condition of incomplete information, it proves that government's rescue damages the reputation of the government as the market supervisor which increases the potential risk of moral hazard and leads to the loss of social wealth and the regulatory inefficiency.Chapter three discusses the evaluation index system of government's rescue, regulator's reputation and regulatory effectiveness.Chapter four analyzes the history and development of foreign research on government's rescue, regulator's reputation and regulatory effectiveness based on foreign experience.Chapter five does an empirical research on government's rescue, regulator's reputation and regulatory effectiveness in China and explores the potential ways to improve regulatory effectiveness in combination of foreign experiences.