Financial Innovation and Monetary System Investigation into Stability

Along with further deepened economic globalization and financial internationalization, financial innovation has gained an abrupt development, The development of which has directly reinforced the close relationship between each financial institution, each financial market, financial institution and financial market. At the same time, it has influenced at a different levels the conduct of the central bank, commercial banks, financial market and financial regulation, and impaired the capacity of financial system for covering local risks, and the overall stability of financial system will be lowered with it. Financial innovation has also promoted financial internationalization trends which are characterized by financial transaction internationalization, financial market internationalization and cross-border capital flow, making the local financial risk vulnerable to be converted to a comprehensive financial risk, hence influencing the stability of financial regime.