Research On The Evolution And Simulation Of Financial System Fragility

The outbreak of the U.S. subprime mortgage crisis in2007began in a credit crisis, evolved into a global economic crisis eventually, and had brought great impact on the development of the world economy. The outbreak of subprime crisis reveals the hysteresis and blind zone in the supervision of financial institution’s innovation behavior. The frequent financial crises in recent years amply demonstrated that the inherent fragility of the financial system has become the source of the outbreak of the financial crisis.In this thesis, based on the existing paper on financial fragility, we define the concept of financial system fragility, and sum up the generating factors of financial system fragility, the internal factors including asymmetric information, bounded rationality and herding, and the defect of the financial institution management, and external factors including financial liberalization, financial homogenization, economy virtualization and economic globalization. However, the financial system fragility is not equivalent to the financial crisis, there is an evolution from financial system fragility to financial crisis, and the level of financial supervision and financial innovation play an important role in this evolution. In this thesis, the analysis of financial system fragility bases on the following three aspects:The first, using the adaptive cycle theory of ecological systems, we establish the financial system fragility evolutionary model. The model consists of three properties, including potential, connectedness and resilience, processes four stages successively, including exploitation, conservation, release and reorganization. Accompanied by the accumulation and ease of the financial system fragility, the financial system achieves the evolution and development.The second, using the theory of evolutionary game, it establishes the evolutionary model of the agents of financial institution and financial supervision institution in the financial system. Basing on the model solution and parameter analysis, describe the behavior of financial institution and financial supervision institution under financial crisis.The third, using the Multi-Agent simulation methods, basing on the Repast simulation platform, we make the simulation experiment on the financial institutions and financial regulators conduct, and analyze the impact of the leverage rate of financial innovation and the efficiency of financial supervision on the evolution of the financial system fragility.Finally, basing on the above analysis, we put forward that we should focus on the internal management of financial institution, the external supervision of financial institution and strengthen the government intervene in the financial system, to ease the financial system fragility, maintain financial system stability and make financial play an active role in economic development.