Financial Ecology Environment Research Based On System Dynamics

China’s financial ecology environment shows obvious regional differences. Accordingto the quality of credit assets, the worst and best regional areas’ non-performing assetsratio can differ by more than10times. In order to more objectively reflect financialdevelopments status and more effectively to improve financial efficiency, we need to payattention to the regional financial ecology environment.The favorable financial ecology environment can help to reduce financial risks andpromote the sustainable development of social economy. Under the condition of marketeconomy, regional financial ecology environment not only affects the effectiveness ofmonetary policy transmission mechanism at the regional level, but also directly determinethe regional economy’s attraction of financial resources and the difference betweenregional financial resources, and then determine the core effects of the regional finance.Therefore how to evaluate an area’s financial ecology environment reasonably so as tofully and accurately reflect the financial ecological situation in the region will beparticularly important.The financial ecology environment system follows the law of cause and effect, it hasthe characteristics of dynamic, open, high-order nonlinear, multiple feedback, complextime-varying and so on. Traditional research methods have some limitations, they cannotreveal the internal mechanism of financial ecology environment comprehensively andsystematically. This article uses the theory and methods of system dynamics to analyze thefinancial ecology environment of Shandong province for the first time. According to theinformation feedback theory, the system is divided into the economic operation subsystem,government behavior subsystem, financial development subsystem, social credit andregime subsystem, and determines the causal relationship between the internal feedback subsystems and each subsystem, then build casual diagram and structure flow chart ofShandong financial ecology environment. With the help of system dynamics’ Specialsoftware Vensim PLE, the paper simulates and predicts the future development trend ofmain factors, and through regulating the regional GDP growth rate, financial self-sufficiency, legal environment and loan-to-deposit ratio to make policy simulation offinancial ecology environment and achieve optimal control. At last it puts forward relevantpolicy suggestions in terms of economic fundamentals, financial development and socialintegrity based on empirical results.