Research On Improving The Flow Regulation Of China’s Cross-border Foreign Currency Funds

With the current economic outlook is positive, the deepening of economicreform, integration into the global economy, the degree of financial integrationdeepening of cross-border capital flows have also continued to expand.Cross-border capital flows to China’s economic development has broughtopportunities and challenges, increasing the pressure on China’s macro-controleconomic and financial stability as well as increased operational risks. In thiscontext, this paper analyzes the existing cross-border supervision of the foreigncurrency liquidity situation, analyzes the current problems in supervision, crisisprevention through the use of monetary theory and the practice of engaging inforeign exchange management experience combined with innovative proposedsolutions improve cross-border capital flows regulatory response.This paper is divided into five chapters. The first chapter is the introduction,which introduces the research background and significance. Pointed out that thecurrent global trend of cross-border capital flows as well as our country iscurrently facing the pressure of cross-border capital flows led to the currentcross-border financial supervision system has been difficult to adapt to the requirements of economic development. By induction several scholars oncross-border capital flows, theoretical research, summarize results by settingcross-border financial transactions tax, to increase cross-border capitaltransactions costs and improve cross-border capital flow threshold to achieveprevent cross-border supervision of liquidity risk target. Innovation of this paperis to present the overall supervision of the foreign ideas, namely open andmanage both the cost and efficiency of both, balanced management of inflowsand outflows, and related policy coordination.The second chapter is the theoretical basis for cross-border capital flowsmonitoring. The first is elaborated the concept of cross-border capital flows andhot money, analyzes the relationship between the two, come to the pursuit of hotmoney is spread income for the purpose of providing better returns rapidlytoward the high mobility of any country across border capital flows conclusions.Then analyzed cross-border capital flows both positive and negative effects, Ibelieve that to be a correct view of cross-border capital flows impact on China’seconomy. Finally, by describing the history currency crisis theory analysisreveals that if the international financing external diseconomies exist, then it willlead to domestic and foreign interest rate and the exchange differences, resultingin a negative impact on impact, causing a recession or even a currency crisis. Toarrive at the theoretical basis for the third-generation currency crisis preventiontheory combined with China’s actual conditions, to achieve complete financialregulatory body set up, establish clear regulatory principles, to strengthen the construction of improving the financial regulatory system.The third chapter is cross-border and foreign currency liquidity ofregulatory status and problem analysis. The first is the state regulation ofcross-border capital flows, and regulatory status of history, come to our currentexistence of cross-border capital flows will increase the potential risk is basedon money supply, will lead to the rapid rise in prices and would undermine theindependence of monetary policy. Then enumerate the current regulation ofcross-border capital flow problems, such as cross-border capital flows loopholesin regulatory policy, cross-border capital flows lack of harmonization ofregulatory mechanisms, commercial banking supervision subrogation difficult toimplement cross-border capital flows, cross-border capital flows and foreigncurrency statistical monitoring system is not sound and so on. Finally, the authorof the above issues cause analysis, believed to be primarily due to regulatory andinstitutional protection is imperfect, arbitrage mechanisms and personnel qualityneeds to be improved leading to the above problems.The fourth chapter is by learning English and Brazilian regulatoryexperience cross-border flows of cross-border capital flows come onSupervision. The UK experience of cross-border capital flows Enlightenment isto improve the relevant sectoral coordination mechanisms to strengthen bankingsupervision, timely sharing of monitoring data and to further improve the marketmechanism. Brazilian regulatory experience to cross-border capital flowsEnlightenment can learn Tobin tax management policies to strengthen the supervision of cross-border capital flows.The fifth chapter is for the present, China’s cross-border supervision of theforeign currency liquidity problems, first by improving the construction ofcross-border capital flow monitoring system proposal is to improve the existingmajor foreign exchange management policy, the implementation of the Tobin taxadjusted cost of capital flows, strengthen the foreign exchange designated banks’subrogation supervision "to strengthen foreign exchange management teambuilding and improve the quality. Second, by improving the cross-border capitalflows regulatory coordination mechanism, mainly the formation of monitoringand supervision of the foreign currency linkage mechanism, the formation offoreign capital inflows and outflows across the joint supervisory mechanism andthe establishment of foreign investment funds system abnormalitiescollaboration inspection mechanism. Third, by improving the cross-bordercapital flow monitoring system proposal is to improve the main foreign currencycross-border capital flows monitoring system, the establishment of cross-bordercapital flows and early warning system.Innovation of this paper is to currency risk prevention from the perspectiveof theoretical studies, to analyze and judge of cross-border capital flows andforeign currency regulatory risks, the analysis of objective problems, the systemput forward the solution of cross-border capital flows and foreign currency riskof regulatory measures.