The Research On Financial Macro-prudential Regulatory Framework Of China

The minimum capital requirement for micro-prudential supervision since1980s was once the dominant view of the financial sector regulators, accepted by the countries. Instead of completely disappearing, financial crisis is growing, which makes people feel puzzled about the ability to finance micro-prudential supervision to prevent and resist financial risks. Lacking of real information and effective tools, the micro-regulatory approach based on external regulation and the direct supervision can not resist the systemic financial risks dormant within the system. After the subprime mortgage crisis, the world’s financial regulatory structure is undergoing unprecedented changes, which involved all aspects of the theory, practice, policy and etc. Macro-prudential comes to be the focus of public; China will also put building "counter-cyclical macro-prudential institutional framework" into the "12th Five-Year Plan" recommendations. How to construct the financial regulatory system in a broader macroeconomic perspective has become the spotlight of academia and economy and financial sector. Therefore, constructing a reasonable macro-prudential framework has great theoretical and practical significance to guard-and defuse the impact of financial risks.The basic meaning of risk is the uncertainty of future results. From the point of view of the root causes that lead to financial risks and risk-averse, risk can be divided into systemic financial risks and non-systemic financial risk. The logic of micro-prudential supervision is dealing with systemic financial risk. But due to the presence of the fallacy of composition, the optimal strategy and the rational behavior of individual financial institutions are not necessarily able to produce the best social results, and even may promote economic to e extreme. In contrast, the macro-prudential regulatory which treat systemic financial risk as the perspective core, can effectively response to infectious and overflow of the systemic financial risk. Generally speaking, Macro-prudential supervision has two "dimensions":First, the inter-agency dimension, which aims to address the cross-sector risk at specific time point; Second, the time dimension, which aims to analyze the risk of future trend. Macro-prudential start from the whole financial system, consider the linkages between market and market participants, concerned about the accumulation level of systemic financial risk and the conduction between the real economy and virtual economy. Differences and relations exist in macro-prudential and micro-prudential. Taking any kind of regulation respectively alone is difficult to ensure the stability of the entire financial system, only effectively combining both can the truly high efficient regulation is realized. Since2009, the U.S., EU and other Western countries all have made the breakthrough stage of financial regulatory revolutions after the financial crisis, they start giving the macro-prudent enough attention, and have successfully constructed the framework of the macro-prudential supervision. This gives our country a great revelation, included speeding up the research process in a timely manner to carry out related work; combing with the actual situation in macro-prudential framework construction; strengthening coordination and clearing responsibilities to prevent the policy objectives and regulatory become divorced.The mechanism of formation and measurement of the systemic financial risks has always been a hot topic and difficulty of academia. Although in reality there can not be a complete indicator system to accurately warning or even measure systemic financial risk, but this does not prevent us using necessary technical means to measure the systemic financial risk. However, many foreign advanced models can not be applied in China, only the factor analysis method is more suitable. The index system which built by the factor analysis, including the macroeconomic environment, financial system stability, the risk of government debt, the risk of foreign investment and exchange rate impact, and the quality of management of financial institutions. As seen from the empirical results, only in2003and2004, systemic financial risks in China did not fully exposed, the status of other years are not optimistic. From2005, the risk have been showing the increased trend gradually, and reached its highest point in2009. In short, the financial situation is very grim, although in certain extent the situation is effected by the international financial crisis, but the implementation of macro-prudential supervision is still urgent. By analyzing the coefficient of factor score, it can be found that improving the macroeconomic environment, stabilizing the financial system and controlling foreign exchange rate impact of risk have more effectiveness on reducing the risk of systemic financial, which compare to better government debt risk and improve the quality of management of financial institutions, and that is the key of macro-prudential supervision.As our country got a long-term period of planned economy, the development of market economy is not mature, and given the special circumstances of the primary stage of socialism in China, the development of financial markets is not sufficient, the overall financial supervision focus on state administrative control, the concept of supervision lag seriously. We need to make a change in the fundamental concept, so as to respond to systemic financial risks more effectively, which including:establishing the concept of supervision concerned with the overall risk rather than "split"; extremely optimizing the external nature of the systemic financial risks; being based on risk management rather than being based on fixed rules of framework; monitoring data of financial institutions is not equivalent to the level of systemic financial risk. The current implementation of the macro-prudential still faces many problems:market participants, market regulators, and the complexity of market system itself. The importance of macro-prudential supervision includes sound macroeconomic regulation and control, the reformation of financial system and combing with our special conditions. On building of the regulatory framework, the State Council need to set up a macro-prudential committee, which position is ministerial level, directly under the State Council, carrying out corresponding duties and specific tasks. Arrangements that perfect the macro-prudential supervision framework include:inventing effective macro-prudential supervision tools; strengthening the financial infrastructure, and improving early warning mechanism of systemic financial risk; further regularize China’s capital market in order to prevent asset bubble; expanding the scope of regulation and strengthening the supervision of important systemically financial institutions and financial innovation; enhancing policy coordination and sectoral coordination to realize financial stability; increasing international communication and international cooperation.