Study On The Regulation Of Local Financial Institutions By Local Government

Local government financial management system is an essential constituentpart of China’s financial system. In recent years, with the understanding of the finance is the core of modern economy is deepened gradually, the enthusiasm of localgovernments at all levels involved in financial management is more and more strong, the provincial government and the government of the majority of city, county have set up theoffice of financial work and other special departments, due to the failure of financial markets and the financial industry has itself inherent vulnerability, we need to implement regulatory about financial industry. The main purpose of our government on the financial regulation include in order to maintain the stability of the financial sector development, to establish a good financial order with the implementation of monetary policy, to provide support for economic development and safeguard the public interest. The main body of financial regulation is a government department or government department authorized, thus specific government actions in financial regulation can impact financial industry, this effect is a problem worthy of study. Some problems such as repeated supervision, supervisionblind spot, mismatch of power and responsibility, and function confusion still exist in thepractices of local governments. Based on the analysis of main reasons for lack of currentlocal government financial management system, coupled with ideas learned from foreignexperience and theory guideline,this paper suggests that gradually perfecting local governmentfinancial management system could be started with several measures including combinationof centralization and decentralization of central and local government, relationship between financial development and risk prevention,demand and foundational system arrangement, etc.