Based On Incentive Compatibility Of The Commercial Banking Regulation Effectiveness Research

The financial industry as a pillar industry of the national economy, is the core of China’s socialist market economic system. With the recent rapid progress, economic development of China’s financial reform, while practicing WTO commitments, China’s banking industry faces enormous challenges and opportunities. Therefore, to improve the overall effectiveness of banking supervision, enhance the core competitiveness of China’s banks, to ensure stable operation of the entire banking system has become a huge issue our country and the world governments and the financial sector are much needed face. In this context, improving banking supervision status, highlighting the role of banking supervision is particularly important. As an important public policy and government public one of the functions of banking supervision, improve the effectiveness of their supervision, start from both costs and benefits, the introduction of the concept of incentive compatibility, the balance of interests of all parties, is the inevitable trend of bank supervision. However, in reality regulatory practice, the regulatory authorities to develop regulatory acts only consider its own regulatory objectives, ignoring the interests of financial institutions and the public, to measure the effect of the regulation only be evaluated from the degree of realization of their regulatory objectives ignoring the overall social benefits are increased, these issues are explained with the lack of regulatory authorities and banking institutions and the general public in the regulation, and therefore will always appear in the real implementation of the bank regulatory policies with regulatory agencies do not take the initiative and do not actively participate in the public inadequate supervision of banking institutions incentives or constraints loopholes insufficient, so the introduction of incentive compatibility in banking supervision in regulatory philosophy, and fully mobilize the enthusiasm to participate in the regulatory body, to overcome the obstacle of incomplete information to regulators that will reduce regulatory costs, improve regulatory efficiency. We are pursuing the effectiveness of banking supervision is a regulatory body as far as possible to all parties to maximize the effectiveness of supervision, toward this goal for research and practice, the future development of China’s banking regulatory theory, to promote the rational use of financial resources, protection sustained, healthy and stable development of China’s banking industry has theoretical and practical significance is very important.In recent years, information economics and game theory of development, so that the original only a breakthrough in the management of incentive theory occurred, the bank regulatory philosophy is no longer confined to traditional areas, the integration of more regulatory theory of new ideas in reality it has been effectively demonstrated. This regulatory model based on incentive compatibility initiative into full play the market, while also allowing the bank has some discretion to mobilize the enthusiasm and initiative of the bank, formed between banks, regulators and the general public of the three positive interaction, the maintenance of financial stability and promote the development of the banking sector improve regulatory efficiency and protect the public interest will have a positive role in promoting. The rapid development of innovative financial instruments for the banking industry and the economy to provide a broader space for development, diversification in the direction of regulation will also continue to advance incentive compatibility. Therefore, the study of the effectiveness of banking supervision has become even more is particularly important, this paper introduces the concept of incentive compatibility supervision, supervision of incentive compatibility problem between the main game analysis were also conducted on the effectiveness of banking supervision the cost-benefits analysis specification, on the basis of co-ordinating the full text on how to improve the effectiveness of banking supervision and better mastery in banking supervision put forward the concept of incentive compatibility appropriate comments and suggestions. Stage, China’s commercial banks facing enormous challenges from home and abroad, to improve the effectiveness of banking supervision can make the development of China’s banks more competitive, so we explore the concept of how to improve banking supervision in the study, motivation and obilization of the regulatory body improve regulatory effectiveness has important theoretical and practical significance.