The Research On The Impact Of Bank Competition On The Financial Consumer Protection

The U.S.subprime crisis in 2007 had caused serious losses to consumers and the financial market,so the governments began to realize the management behavior of financial institutions was related with consumers,rights.Fair and effective competition in the market is a precondition for protecting the legitimate rights of financial consumers and a core pillar of financial stability.Therefore,the study of the relationship between bank competition and financial consumer protection is helpful to the theoretical research and practice of financial consumer protection in China from the perspective of competition.Firstly,this paper introduces the existing achievements of bank competition and financial consumer protection on the basis of literature review,expounds the mechanism of bank competition on financial protection and confirms the positive significance of bank competition to consumer protection with international practice.Secondly,based on the results of the global banking supervision in 65 economies in 2012 by World Bank,this paper selects 11 variables from four dimensions of information disclosure,mechanism construction,legal protection and dispute settlement,builds a comprehensive index system,measures the financial consumer protection level of each economy using principal component analysis and makes the empirical analysis of the effect of bank competition on financial consumer protection.The results show that bank competition has significant positive relation with financial consumer protection.From Chinese statistical results,Chinese banking market structure is still monopolistic competition structure.Chinese banking competition also makes the positive effects on financial consumer protection.However,the lack of standardization of institutional behavior causes several problems in Chinese financial consumer protection including information disclosure and unfair trade.Finally,this paper hopes to improve the status of Chinese financial consumer protection by enhancing bank innovation capability,optimizing the ownership structure,strengthening the construction of supporting system in market financial service and promoting the management concept of supervision departments.