An Analysis on the Hindered Financial Intervention of Local Governments and Welfare Loss

By the aid of method,an abstractive analysis is made on the course of out-of-control over investment and credit loan resulted from non-cooperative gaming in two regional economic models.An empirical analysis is made to let out one of the important reasons for too rapid placement of credit loans for China's financial institutions in recent years,overheated investment of real estate,increasingly bigger inflation pressure:the local governments in seeking local and short-run interests are interfering financial resources allocation in a hindered manner.The hindered intervention conduct of the local governments not only by way of troubling the healthy development of financial system and institutions,affects the steady operation and well-performing development of the whole financial system,but also,in the long-run,causes the deterioration of local financial ecologic environment,and ultimately impairs the sustainable development of local economy.Therefore,for a healthy development of the whole economy and local economy,it's compulsory to take such measures as,normalizing local governmental behavior and positioning local governments' functions;deepening market-oriented reform of financial institutions,reinforcing the independence and self-discretion of the institutions' operation;strengthening authority and power of financial regulation and dissipating local intervention so as to mitigate and gradually dissolve the hindered financial intervention behavior of the local governments.