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The Study On The Legal System Of China’s Informal Finance Risk-based Regulation

Posted on:2015-12-14Degree:MasterType:Thesis
Country:ChinaCandidate:J FangFull Text:PDF
GTID:2296330431983236Subject:Economic Law
Abstract/Summary:PDF Full Text Request
Informal finance is different from the formal financial system which is set by theauthorities. There is no governmental supervision on the money lending between theinvolved parties.China’s Informal finance is developing prosperously in recent years. It has playedan important role in promoting economic development. Nevertheless, in the meantime,more and more people pay great attention to its risk. For lacking of supervision andprecaution, regional financial crises sometimes may occur due to Informal financial.As a result, it can destruct local financial, and even bring negative effects both sociallyand economically on the whole country. So there is an inevitable necessity to establisha legal supervision system for Informal finance.This dissertation studies on the origin and operations of Informal finance, the rootof its risk, the relationship between China’s dual credit system and the risk of Informalfinance and so on. Based on the analysis above, suggestions are provided on how toestablish a legal system of Informal financial risks in China. The dissertation is madeup of five parts, including the basic study on the risk of informal finance, the currentsituation of China’s Informal finance, the analysis of the current legal supervisionsystem of Informal financial risks, the study on abroad legal system of informalfinance, and the suggestions on how to improve the legal system.As lack of supervision and precaution, informal finance is faced up withcatastrophic risks. Although it is unlikely for informal finance to trigger financial crisisin large scale, it will bring negative effects on local region. With case studies andtheoretical support, the dissertation demonstrates the reason why the risk of informalfinance burst out, and points out that it is of great significance to have the informalfinancial risks controlled.The dissertation studies the proposition about the legalization of informal finance,indicating that this proposition overlooks the reflection of informal finance. It alsopoints out the current legal supervision system hasn’t kept track of the fast developinginformal financial. By reviewing several supervision patterns of foreign countries, thedissertation suggests that the authorities should keep an open mind about informalfinance, draw a clear boundary between the legal and illegal informal financial activities, and encourage the informal finance to evolve into the formal financialsystem.According to the informal finance’s developing process, its current problems andthe growing trend, the dissertation comes to the conclusion that authorities shouldbreak its system of government-set interest rates as soon as possible, deregulatefinancial system, put informal financial under legal supervision, develop a multi-levelfinancial services system and guide informal financial institutions into the formalfinancial system.
Keywords/Search Tags:Informal finance, Risk prevention, Deregulation, Legal system
PDF Full Text Request
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