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Deepening the Supply-Side Structural Reform of China's Financial System: A Financial Function Perspective

【Authors】
ZHENG Liansheng
【WorkUnit】
Institute of Finance and Banking, Chinese Academy of Social Sciences, 100028.
【Abstract】

Deepening the supply-side structural reform of the financial system has become an important task of financial development for better serving the real economy in China. The financial service to the real economy is realized through the financial functions of trading promotion, resource allocation, risk management and economic regulation. Each function is a relatively independent and organic unity. The trading promotion function is constrained by the weakness of legal framework and the difficulty of matching demand changes. The resource allocation function is constrained by the distortions of financial institutions and financial markets, the poor marketization of financial factor pricing and the need to clarify the relationship between market and government. The risk management function needs to deal with the problems of endogenous financial risk and policy side effects. The economic regulation function of the financial system needs to be further reformed in terms of function orientation, price match and institutional construction. The supply-side structural reform of the financial system needs to focus on improving the financial functions to enhance the overall efficiency of financial services for the real economy. First, it needs to strengthen the financial basic functions by providing effective payment and settlement services. Second, it needs to give full play to the decisive function of the market with the combination of financial elements, institutions and markets. Third, it needs to resolve financial risks and optimize the derivative function of the financial system. Finally, it is important to clarify the boundary between government and market.

 

JEL:G01, G18, G28

【KeyWords】
Financial Function, Functional Defects, SupplySide Structural Reform of the Financial System