A Study On The Financial Security And Financial Regulation Policy In Transition Countries

With the deepening of financial globalization, countries continue to pursue financial liberalization and lift financial regulation step by step. Although abandon the control over the domestic financial market can promote a country’s financial system operation efficiency and resource distribution efficiency, the financial risks are also increasing. In the process of financial opening, both developed countries and developing countries are difficult to escape the financial crisis. The outbreak of the financial crisis will cause serious influence not only on the political, economic and social part of the crisis countries, but also on the world economic development because of the financial risk contagiosity. Now the world economy is still tough, facing the insecurity factors and political unrest, the prospect of transition countries is not so bright and the financial security is highly problematic. Therefore, transition countries need to improve the financial system, adopt a more advanced method of financial regulation and a more reasonable financial system. In a word, There are many challenges for transition countries to maintain financial security.Few scholars, both at home and abroad, regard China, central and eastern Europe and Russia as a whole research object to consider the effect of government macroeconomic policy and the correlation between financial globalization and financial security in transition countries, which cause the absence of research over the particular relationship between transition state’s financial security and it’s macro-control policies. In fact, for the sake of financial security, transition countries with high opening-up level in finance industry like Russia and CEE countries have had a lot of exploratory practice on financial strategy and macroeconomic adjustment policies in the process of globalization. Thus, to sum up the experiences of Russia and CEE countries to maintain financial security has practical meaning and those experiences will be reference for the current financial reform and opening, financial development and financial security in China. Moreover, financial security problems directly affect nation’s overall economic and social stability; therefore, further study on the relationship between transition country’s financial security and its macro-control policies under the background of financial globalization is of great political significance.First, This paper studied the theories of financial security and discussed the relationship between financial globalization and financial security.Then the paper used comparative analysis method to analyze financial security situation of Russia, CEE and China respectively, analyzing the capital flow structure, the capital account opening status and the status quo of banking market structure in transition countries. In this part, the paper focused on the motivation and pattern of foreign financial institutions entering the financial markets of transition countries and their impact on it. On this basis, the paper gave an overall analysis and evaluation on the financial security condition of transition countries, it found that financial globalization can bring benefit to transition countries and risks at the same time, the impact on macro financial stability in transition countries, especially in CEE countries, that foreign banks caused can not be ignored. As an important component of macro-control, financial regulation has played a major role in the maintenance of stable operation of financial system in transition countries. Therefore, this paper used regression method to analyze the performance of financial policies in maintaining financial security of transition countries. In order to reveal the particularity of macro-control policies based on the financial security in transition countries, this article focus on horizontal comparison of different countries in transition in the empirical part, this is the summation of other country’s experience and the supplement of academic study on financial security in transition countries. In the paper, the empirical results show that inflation targeting will help improve the financial stability of the transition economies with a floating exchange rate system; this conclusion has a certain reference value for Chinese currency policymaking. Finally, this article put forward financial strategies and policy recommendations for financial safety in our country on the basis of experiences from Russia and CEE countries.The innovation point of this essay is to regard China, CEE and Russia as a whole research object to study financial security based on the perspective of macro-control policy under the background of globalization. However, the analysis has shortcomings in terms of financial safety conditions in the transition countries.In view of the fact that the national conditions among countries are significantly different, the revelatory conclusions of this essay may only be references to China, the policy suggestions may need to be adjusted according to the specific characteristics of financial development and the actual situation of our country.