Study on Chinese Systemic Risk Prevention

Abstract

Since 2008, the global financial crisis caused by the US sub-prime mortgage crisis and European sovereign debt crisis, like a hurricane, sweeps across the whole world, putting a heavy blow to the world’s big economies. Some of them are still staggering along the course of recovery until the moment. Its huge destructive impact arouses the attention of people around the world and how to prevent systemic financial risk thus becomes a focus of all governments. To this end, the USA establishes a dedicated Systemic Risk Council; European countries build another Systemic Risk Council based on the previous Banking Regulatory Bureau, Securities Regulatory Bureau, and Insurance Regulatory Bureau; Chinese central government emphasizes for many times that we should hold the line for any regional and systemic financial risks, and active research is taken in both theoretical circle and practical departments for constructing a coordinated regulatory framework in China. Besides, all the governments also conduct research based on risk measure, early warning, and other technical indicators. This chapter will explore and conduct empirical research on how to prevent systemic financial risks.