An Analysis Of Intervention Policy In Abnormal Fluctuation Of Stock Market

In mid-June 2015-early 2016,China's stock market fell sharply.Securities and other relevant organizations and associations,together with other public organizations have introduced a series of intervention policies including:reduce interest rate and transaction costs,inject liquidity into the market,clean up the funds,forbid short,reduce and suspend IPO issuance and fuse mechanism,among many others.This paper mainly studies the stock market intervention policy from the perspective of public policy in the form of case study.From the intervention effects,some intervention policy delayed the stock market decline,helped to ease the liquidity crisis,however,some intervention policy effect was not obvious or even contrary to the original intention of intervention.The revisit of current round of intervention policy indicated that:the argument is not sufficient,the implementation lacks coordination,cost and income is not enough to match,and the legal basis is not sufficient.All these inefficiencies lead to the intervention deviated from the true capital market and inefficient policies.The author believes that the reason for current round of abnormal fluctuations in the stock market and the characteristics of the intervention is,the leveraged stock market bubble under the premise of the high leverage,and the liquidity crisis lead by the stacking large area due to the accelerated decreasing stock market.The bank financing and other funds illegally enter into the stock market to hedge is the root cause of liquidity depletion.The sharp change in the stock market reflected a serious market failure and government intervention is needed.However,improper intervention is likely to lead to government failure.We need to prevent the market failure and government failure cycle.The crisis also exposed the existence of several issues associated with capital market ideas and logic,departments and cooperation,regulation and innovation,transplantation and digestion among others.The author believes that it is imperative to explore the establishment of the stock market emergency early warning coordination mechanism,functional supervision and behavioral supervision of both the regulatory system,"active and invasive"regulatory model,strict control structure and other leveraged product risk,and also focus on solving other basic issues at the capital market.