Risk Effect Research On The Capital Account Liberalization Of Financial Security In China

With the formation of the pattern of economic and financial integration, China’s rapid economic development, the openness of the financial industry have become more sophisticated, but it also increases the probability of occurrence of financial risk. China’s economic development in the restructuring transition period, a new normal economy in 2014, the general secretary Xi Henan investigation. By the 1997 Asian financial crisis, the 2008 follow-up to the global financial crisis, China’s capital account liberalization frequent shocks, the government adopted a more cautious and rational attitude in dealing with the liberalization of the capital account. Faced with capital account liberalization suffered from the impact and influence, economic management departments, academia, business and other fields have begun to explore how to effectively guard against financial crises.This paper will study the financial risks and the intrinsic link between capital account liberalization and mutual action. First, the scope of the study made to define financial risk, the risk of selecting a representative foreign exchange market volatility, the banking system of internal risk, the risk of speculative bubbles in asset markets three types of risk. And describes the linkage mechanism of capital account liberalization and financial risk categories. Second reference literature methods commonly used to measure three types of financial risks. Again using the unit root test, Granger causality test and co-integration test of China’s capital account liberalization and three empirical analysis of financial risk. It concluded that: China’s capital account openness improve financial Granger cause an increased risk of the banking system risk and the risk of a speculative bubble in asset markets also constitute capital account liberalization Granger cause, but the risk of fluctuations in the foreign exchange market is not capital account opening Granger cause. Three types of financial risk increases will slow down the process of capital account liberalization. Overall, there is a long-term stable equilibrium relationship between China’s capital account liberalization and financial risk categories, once deviated from equilibrium by short-term fluctuations, then there will be the driving mechanism of endogenous non-equilibrium state equilibrium back. Suggestions in this paper are: scientific organization of domestic capital account liberalization order; promote the reform of the exchange rate mechanism as soon as possible; prevent internal risk in the banking system; promoting the capital market and the joint development of capital account liberalization.Innovation of this paper is to define the scope of financial risk, financial risk categories from which to choose a representative for the study, the degree of openness of the capital account and three types of financial risk quantification and empirical analysis. The downside is open to capital and financial risk categories linkage mechanism analysis of theoretical models do not have a system account, theoretical persuasive enough; three types of financial risk measurement methods mentioned in the literature-based, there is no combination of the actual improvements.