Asymmetric Evolutionary Game between Financial Innovation and Financial Regulation ---- Punishment or Encouragement

Abstract

After the financial crisis in 2007, the high risk brought by financial innovation has aroused widespread concern and thinking again. The measures to curb financial innovation in various countries have become increasingly severe. However, under the background of the supply-side reform proposed by the Chinese government, the reform of the financial capital elements of the supply root is imperative. Therefore, how to curb the risk of innovation in financial institutions effectively, while encouraging innovation in favor of financial supply side of the reform of compliance, become an important issue to be solved. Based on the limited rationality, the long - term dynamic game equilibrium between financial institutions and regulators and its impact on financial system and financial market is analyzed by constructing asymmetric evolutionary dynamic game model. Then, analyzing the relevant factors of long-term equilibrium, and puts forward the regulatory measures which are conducive to encouraging the reform of compliance and the reform of financial supply-side.