| IFinance serves as the core of contemporary market economy. The financial regulation contributes to the stabilization and healthy development of national economy. According to the practices in nations with market economy, the finance industry, especially banks, is under the strictest supervision; and supervision over banks plays a vital role in governmental regulation.Dating back to the year 1694, the Bank of England was powered to monopolize the issue of currency and to supervise finance industry. However, in the 1930s, the financial regulation became weak because of the prevailing of the idea of economic freedom advocated by Adam Smith. It is until the post-war period that the financial regulation was strengthened because of the influence of the fact that the "invisible hand" was not everything. In practice, the regulation of banks plays an important role in protecting the interest of depositors and stabilizing the financial system. After the 1970s, finance industry becomes internationalized; but it also becomes vulnerable. The 1990s saw the bankrupt of large banks. It is commonly recognized that the supervision of banks should be enhanced.After the 1980s, the banking industry is proliferating; financial sectors are diversified and the competition is fiercer in China. Meanwhile, China's banking industry is confronted with disorders and risks. So, it is also of great importance to strengthen the financial regulation in China. As China is experiencing transitional economy and the new financial system is not well developed yet, it is of both theoretical and practical significance for us to study China's supervision system of banks.On the basis of economic theories and practices, especially the regulation theories and practices of banks, I analyze the principles and objectives of regulation in transitional economy.The theory of Public Choice is convincing in interpreting the origins and reasons of governmental regulation in contemporary market economy. The point of this theory is that regulation is needed in guaranteeing the efficient operation and deployment of resources while regulation system, as public goods, witch should be supplied by government who represents the interests of the public. In this thesis, I examine the evolution of banking supervision system and the relationship between innovation and supervision; and then, I proceed to illustrate how supervision system works in stabilizing the financial system and reducing the risks of depositors and financial system.In this thesis, I attach great importance to the study of supervision of banks in the transitional economy and evolution of China's supervision systems in the past 20 years after comparing the supervision systems in the U.S. and Japan, and looking into the details of the Core Principles on Effective Supervision of Banks.IIWith regard to the objectives and logical structures of this thesis, I divide this thesis into four chapters.Chapter one is "The general theories of financial supervision". Supervision over banks is defined as a series of behaviors that the financial administration put the activities of banks under control by means of administrative power in accordance with the law. In contemporary market economic system, governmental regulation is needed because the banking industry is confronted with such risks as credit risks, interest risks, market risks, policy risks, national risks and even moral risks. In this chapter, I analyze the process of supervision, evolution of theories on supervision and relationship between financial innovation and supervision.Chapter two is "The supervision system of banks in nations with market economy". In order to keep the stability of financial system, reduce the risks of depositors and financial system, nations have to set up the supervision system. Meanwhile, it is also of vital importance for us to carry out comparative research on supervision systems of different nations with diversified political, economic, historical and cultural traditions. In this chapter, I p... |
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