Study On Division Of Central And Local Financial Supervision Power

With constant development of our market economy and improvement of financial reform, local financial industry has increased rapidly and has made an important contribution to the development of local economy and prosperity of financial industry. Meanwhile, it has been accompanied with increasingly prominent issue of supervision and constant accumulation of financial risks. In recent years, unreasonable structures of our financial supervision system become prominent and therefore, supervision systems are encountering challenges. Vertical allocation of supervision power is an important component for financial supervision system. However, separation of powers for central and local government lack clear legal basis and then it will rise some issues like supervision absence, supervision overlapping, supervision conflicts and so on. Therefore, in construction of financial system, division of central and local financial supervision power has been a theoretical and practical issue to be solved.Since implementation of open-up and reform, financial supervision system has moved forward with exploration, gradually establishing horizontal power separation in financial supervision. Later, it has established China Securities Regulatory Commission(CSRC), China Insurance Regulatory Commission(CIRC),China Banking Regulatory Commission(CBRC) in succession,which made financial supervision separated to China Central Bank and Separate supervision institution of central level. At present, central-led supervision makes financial legislation and financial policy concentrated in central institutions, which makes financial legislation too principled and general and can’t be implemented easily. Financial policy is too general and simple, which fails to consider various practical demands of different regions. In addition, financial resources can’t be covered completely. The Decision on Major Issues Concerning Comprehensively Deepening Reforms was adopted at the close of the Third Plenary Session of the 18th CPC Central Committee released by the Third Plenum of the 18th CPC Central Committee and initially put forward "defining the responsibilities of the central and local financial regulatory responsibilities and risk management" in the form of central file, which will push forward financial supervision system reform in the new round. This reform should be adopted vertical separation power. In the condition of maintaining separated supervision, it tries to break the situation of financial supervision based on central government and explores arrangement of hierarchical, supervision power of central and local governments.In the state of unitary system, it is reasonable to divide the central and local responsibilities in financial supervision and risk management. Moreover, it’s necessary to deal with rights and obligations between central and local governments. The thesis holds the opinion that the reasons leading to incomplete division of central and local financial supervision power are as follows:Firstly, the disorder of the competing interests between central and local governments due to the competing interests between the central and local governments. Secondly, financial risk to fiscal. Because of the power of Resource allocation the government using financial sector instead of fiscal function without the regard of financial risk; Thirdly, Unidirectional configuration power of Central government leads to disadvantages of supervision system. Meanwhile, the local government lacks of relevant legislation to ensure local supervision, which will lead to disordering supervision of local government. Therefore, it’s necessary to divide supervision power of central and local governments. Firstly, on the basis of financial security and efficiency, it should make clear division principle and way of central and local financial supervision power. Secondly, establishing legal framework for separation power of financial supervision will make power division of central and local governments do something according to the law. Thirdly, reasonably making sure the responsibilities of central and local supervision institutes. Finally, it’s necessary to complete function division of supervision institutes and establish coordinating mechanism, which will ensure efficient operation of the complete separated power system.In an attempt to narration of basic theory of central and local financial supervision power, the thesis analyzes present situation of power division and the existing issues in present system and therefore, it puts forward suggestions and countermeasures. Thus, I hopes to bring good solutions in division of central and local financial supervision power. In addition, it tries to explore a way suitable for our national conditions and complete our financial supervision system and safeguard a stable financial order.