"adverse Selection" Problem In The Issuance Of Securities Market And Its Thinking

ABSTRACT0ver the past twenty years, China's stock market has been developing .As a result, it got much achievement, especially in the aspects of the manner of stock issue, the transaction of stock, supervision and management for the market, the system of information revealing and so on. But, it is not enough, and there is still much formlessness in our stock market. According to the writer, in the reality there are many problems to be solved, which has been caused by the asymmetry of information. This article pays much attention to the stock issue market. The planned economy made the non-economy connection between the enterprise and government, which is the background of the analysis. In the issue market, government had more effect on the decision-making about which company will go into the stock market. But, in the past order, the companies, which are not best, will be selected. In other words, the adverse selection problem condition is just like the famous mode of lemon market. Both of themes are caused by the asymmetry of information. Now, the order has been changed. The past model also needs revision. By the analysis, we think the problem was solved partly because the new order weakened the asymmetry of information .As a conclusion, the writer think the problem of asymmetry of information is most important. The reform of stock market means we must take measure to eliminate the asymmetry of information. According to the conclusion, the system of the information revealing was examined. And we found there is much deficiency in the system, which interfered the stock market, carry out its function of the optimization of resource allocation. So the writer bought forward a scheme about the future system of the information revealing should be. The article has four parts. In chapter one, the writer introduced the process and the achievements of the development of the stock market. Chapter two turns to the analysis in the problem of the adverse selection in the stock issue market. In chapter three, the problem was partly solved by the new order. At the same time, the problem of the asymmetry of information was eliminated. Following the analysis in the chapter two and chapter three, chapter four got the conclusion that the system of the information revealing is most important. At the end of the article, an object system was introduced.