Study The Effectiveness Of Banking Supervision Based On The Reputation Of The Regulator Perspective

As a public goods and public services, banking supervision not only bears the responsibility to maintain banking safety, but also affects the legitimate interests of depositors. This paper answers the problem why we need to regulate the banking sector firstly, from the perspective of market failure. Then the paper analyses the general theory of the regulator's reputation and effective banking supervision, find out that the reputation of the regulator can effectively resolve the regulatory failure problem, which were caused by the regulatory information constraints and the different regulatory objective function from public interest. According to the function of the regulator reputation, the paper analyzed how the reputation affects the conduct of banking and the regulation effectiveness. At the basis of the above analysis, also the characteristics of China's banking sector, the last part of the paper tries to find out main constraints on the regulator reputation and make policy recommendations, in order to enhance the reputation of regulators and regulatory effectiveness.From the view of structure, this paper has five parts as following.The chapter one is the Introduction of the paper. It includes the background, value, originality and research method of the essay, and sums up the basic framework, at last this part points out innovation and the lack of the paper.In the chapter two, we study why we need to regulate the banking sector. Firstly, we explain the concept of banking supervision. Secondly, we discuss four aspects of market failure, and conclude the necessity and importance of banking supervision.The chapter three is the general theory of the regulator's reputation and effective banking supervision. Applying information theory and transaction cost theory, also the game tool, we study the emergence mechanisms, functions and features of reputation. In a game model, we discuss the relationship between regulator reputation and effectiveness of banking supervision. The level of the bank's reputation and the regulator reputation, can constrain the bank conduct.The chapter four analyzes how the reputation affects the conduct of banking and the regulation effectiveness. The spill effect of the regulator reputation does an impact on the banking market access. While on the market exit, the regulator should put the attention on the reputation maintain. The regulator reputation can reduce the banks' opportunism and Wrongful act. Through the theory analysis of this part, we conclude the enlightenment about function mechanism of the regulator reputation.The chapter five studies the regulator reputation on the China's banking system. At the basis of the above analysis, also the characteristics of China's banking sector, the last part of the paper tries to find out main constraints on the regulator reputation and make policy recommendations, in order to enhance the reputation of regulators and regulatory effectiveness.