Research On Moral Hazard In Policy Bank And Its Supervision

Policy-based financial institutions are common in the financial systems of countries around the world.As an important supplement to a country's financial system,they are on an equal footing with the banking industry's main body——the commercial financial institutions,but they also have big differences in funding sources,business characteristics,social functions and so on.Over 20 years of growth and progress,the three policy banks——The Export-Import Bank of China,China Development Bank,and Agricultural Development Bank of China have been operating in a stable position to fill the gap in the market and make up for market failures,they have made great contributions to all regions of our country.Therefore,the healthy development of policy banks is crucial to stabilizing the economy.However,with the basic completion of China's interest rate marketization and the impact of emerging industries such as Internet finance,the deposit and loan spreads of the banking industry have generally narrowed,policy banks have not escaped the increasing operating pressure,gradually showing incompatibility with the stage of economic development.Moreover,due to the low cost of illegality,lack of information disclosure and policy bank's special position,they face more special risks,especially for serious moral hazard,the moral hazard exposure is constantly increasing,and it is extremely urgent to solve the problem of policy banks.In November 2017,China's “one-to-one” regulatory approach to three policy banks reflects the country's attention on the risk control and higher regulatory requirements for the three banks.So,this paper takes policy banks as the research object.First of all,it theoretically expounds the basic concepts of policy banks,on this basis,to build game models from the perspective of the government and corporate borrowers,to have a profound analysis of the moral hazard generated by the interaction with government,borrowers and the bank's business operators.Secondly,use the loan cases that can be obtained to prove the process and adverse effects of policy banks forming moral hazard,further propose countermeasures.The whole article is mostly exemplified by the China Agricultural Development Bank,because the China Agricultural Development Bank has the most extensive distribution in China,with 31 provincial branches,339 secondary branches and 1816 systems.Finally,propose regulatory recommendations for moral hazard.For governments and borrowing enterprises,it's necessary to strengthen legal constraints,increase the penalties for moral hazard incidents,improve information disclosure and establish information base,and standardize and expand the “final lender” system.For the policy banks themselves,it's necessary to strengthen internal corporate management,establish an incentive compatibility mechanism and strengthen the whole process of moral risk management.