Research On Financial Consumer Protection In China

In recent years, as the Chinese financial markets has grown rapidly and financial innovation has picked up in pace, financial consumption has become much more widely accepted as an indispensable part of modern life, with a dramatic increase in the number of financial consumers. Financial innovation has not only promoted the diversification of financial services, but also developed a more sophisticated and complex financial markets faced by financial consumers. Meanwhile, the number of consumer finance-related complaints and disputes has been rising, becoming a serious financial and social problem without effective solutions, which highlighted the importance of developing a policy framework and implementation mechanism for financial consumer protection.Financial consumption is very different from traditional consumption in real economy, with the characteristics of intangibility, complexity and risky. Market failures can occur in financial sector due to asymmetric information, externalities and monopoly, coupled with individual irrational behavior caused by cognitive bias, which put financial consumers at a notable disadvantage in financial transactions. Financial consumers are an important base of the development of financial sector. Financial consumer protection is a strong commitment to corporate social responsibility and livelihood finance concept, as well as an inherent requirement of financial market development. It not only concerns individual interests and market fairness, but also affects sound management and sustainable development of financial sector, and even involves overall financial safety and social harmony.On the ground of clearly defined basic concept and fundamental rights of financial consumer, this dissertation makes a profound analysis on the theoretical importance and practical necessity of financial consumer protection from the multiple perspectives of economics, behavioral finance and financial supervision theory, and systematically illustrates the current status and outstanding issues of China’s financial consumer protection. Drawing the international practical experiences of financial consumer protection, this paper put forward positive suggestions and policy recommendations on the development of a comprehensive and multi-level system to improve China’s financial consumer protection.