The Cost-Effectiveness Analysis Of China Rural Financial Regulatory Policy,Starting With The Perspective Of Small And Medium-sized Rural Financial Institutes

As a joint result of our country’s fundamental conditions, i.e., low per capita share of resources, and the objective economic law system, our country has formed a dualistic economic structure segmenting urban and rural areas. Many affecting factors in rural area, such as the backward industry, difficulty in improving peasants’income, and the growing economic gap between urban and rural areas, have restricted our country’s sustainable development of economics.Finance plays a core function of modern economy. It has the ability to cohere and allocate the capital. However, the foundation of rural financial ecosystem is relatively weak at present, and the credit environment in rural area is bad. As a result, it leads to an inefficient location of capital, i.e., capital tends to gather in urban areas due to cities’competitive superiority. In an effort to change the present weak productive forces situation of rural financial markets, provide quicker and better services, and give more financial support to rural economy, financial institutions should fulfill their social responsibilities. Meanwhile it is also a long-term project needs to be investigated by financial regulatory agencies.Compared to general financial institutes, small or medium-sized rural financial institutes in our country have natural relationship to rural financial market. The particular relationship both originates from the historical evolution process, and closely connects to the service positioning of rural financial institutes. It decides that the regulatory policy goal in rural financial field is different from the one in general financial field, In order to protect the rights and interests of rural groups, rural financial regulation is required not only to prevent market risks, but also to preserve the security and. stability of the financial system. Furthermore, it should lead and improve the small or medium-sized financial institutes settle down in rural market, and steadily supply the development of rural economics with products and services.Starting with the perspective of small or medium-sized rural financial institutes, and based on the public interest theory, this thesis reviewed the development history of rural financial regulation in our country, and summarized the present regulatory policies which significantly impact upon the rural financial market. The type and orientation of those policies were given as well.The cost effective analysis method was utilized in this thesis, by means of selecting appropriate indicators, to demonstrate the completion status of regulatory targets by small and medium-sized rural financial institutes for validating the achievement of regulation, as the ceiling effect. A variety of factors, which indicate the effect of those regulatory policies, were also investigated. To this end, this thesis aimed at observing the overall difference between the targets of rural financial regulatory policies and the implementation performance by small and medium-sized rural financial institutes. Investigation in this thesis is promising to help the financial regulatory institutes obtain valuable suggestions or methods to improve the efficacy of regulatory policies for rural areas.