A Research On Political Connections In The Development Of Local Financial

Under the dual role of the international financial crisis and national monetarytightening, the long-term financing problem plagued the development of small andmedium-sized enterprises (SMEs) is increasingly grim. Finally, the problem hadbroken out in2011on a large area which brought serious economic and socialproblems. How to solve the financing problems of SMEs fundamentally, guideprivate financial activities properly and minimize the financial risks are highlyconcerned by the community. China’s financial reform and development have beenin the highly regulated of the government for a long time. The information reflectedfrom the recent reform of the financial system shows that as China’s financial reformcontinues to deepen, the local government is undertaking more and moremanagement functions in the process of the development of new financialinstitutions. As the double agent of the central government and localnon-governmental, local government economic behavior is not only necessary tocomply with the requirements of the central government, but also conducive to the development of the local economy and to achieve the interests of the localgovernment; on the other hand, as independent stakeholder, local government is nolonger a simple central government subsidiary department to implement the policies.The local government who has an independent interest preference intervenes in thefinancial preference strongly, and the most direct way is to control the local financialinstitutions. So in the process of reform and development of the local citycommercial banks, government support and the guidance are obvious characteristics.Therefore, how to regulate the behavior of local government in the development ofthe local financial and handle the complex political association between enterprises,governments, financial institutions and to improve the performance of financialdevelopment correctly is an important issue related to our future financialperformance of political connections in the development of local financial.The article is divided into four parts to study the issue of political connectionsin the development of local financial. First, I conduct a review of the theory offinancial development and the concept of political connections. And then select thelocal commercial banks as the representatives of local financial to analysis the issue of political connections. Combined with China’s national conditions, learn theadvantages of local financial institutions from the United States, Germany and Japan.In the case of the legal system is not perfect, the existence of political connections isalternative legal means, and its role is a positive or negative way. Finally, I putforward some policy suggestions for the local financial. From a theoretical point ofview, it will help improve China’s socialist market economic theory system. Deepenthe theoretical study of China’s reform and opening up policy, and providetheoretical support for regulating the behavior of local government and improve thelocal financial environment of local financial.