How to Understand the Function and Limitation of Financial Supervision

Measurable financial supervision is necessary to guard against financial risks,but its function is limited.Erroneous or too stern financial supervision not only cannot reduce the financial risks,but also cause or aggravate financial risks.Nowadays,the key function of financial supervision should be promoting the development of China's finance,instead of unilateral emphasizing the financial stabilization and prevention of financial risks.Financial supervisaion is indispensable to financial stabilization,but it cannot take the place of monetary policy.If the effect of monetary policy is unclear,it's usually ineffectual to achieve policy aims with the aid of financial supervision.To improve the financial supervision and maintain the stabilization of financial market,the government should continue promote the sweeping reforms of financial system.To reform financial system,we should hold on the direction of marketization.