The Research Of Market Withdrawal Mechanism Of Financial Institution

In recent years, China’s financial marketization reforms deepen gradually, the operating efficiency and competitive strength of financial institutions also improve significantly. But with the accelerated process of interest rate marketization, the rise of the Internet Financial and the opening access to private capital, the financial industry competition is becoming increasingly fierce, financial institutions which have weak risk management ability are more likely to get into operation trouble. In the face of the financial institutions operating problems, if regulatory authorities fail to take effective measures to solve the problems, it will not only damages the interests of creditors, but also may make the security and stability of the whole financial system suffer heavy shock, and then affects the stability of the macroeconomic development due to the "Domino effect" of the financial crisis. So to improve the financial institutions market withdrawal mechanism is imminent. However, China’s financial institutions has been under national protection, market withdrawal practice is relatively less, there are still many deficiencies in the financial institutions market withdrawal, so it is very necessary to conduct a comprehensive study on the financial institutions market withdrawal.This paper firstly explains the basic concepts of financial institutions market withdrawal and the related theory and reveals the inherent root of financial institutions market withdrawal to lay the theoretical foundation for the following research. Secondly, with America and Japan as representative, the paper summarizes the advanced experience of foreign financial institutions withdrawing from the market. First, establish deposit insurance system to clear the organization of financial institutions market withdrawal; second, utilize market withdrawal ways and means which can minimize costs; third, establish financial asset management company to specialize in the disposal of non-performing loans; fourth, establish bankruptcy losses and disposal cost sharing mechanism. These institutional arrangements provide experience reference to perfect our financial institutions market withdrawal. Then it overviews the current situation and history of China’s financial institutions market withdrawal and takes the revoke case of eight credit cooperatives in Golmud city Qinghai province as an example, analyzing the problems existed in the China’s financial institutions market withdrawal. First, the financial risk early-warning mechanism is inadequate; second, the risk-sharing and compensation mechanisms are missing; third, administrative intervention is too strong and the means and ways to withdrawal is single; fourth, non-performing loan management is decentralized. Finally, combined with the precious experience of foreign financial institutions market withdrawal, the paper put forward the principles and suggestions for financial institutions market withdrawal. First, establish risk early-warning mechanism; second, establish financial risk compensation and loss-sharing mechanism; third, reduce government intervention and implement multi-level market withdrawal ways; fourth, establish non-performing assets disposal mechanism; fifth, establish financial institutions market withdrawal accountability mechanism.