By Gao Wei　

Date: 2005/02/03

Abstract:

The most striking feature of stock market risks is the strong externality, which is determined by the system risks. The externalities of the risks require a strong regulation on stocks, however the factors in risk management such as capturing, rent-seeking, time lag and etc., affect the efficiency of the stock market. This study works on the objective, tendency and models of the stock market and holds that the buffer function of self-disciplinary organization as the front-line risk prevention should be fully developed to reduce the social pressure on securities regulatory commission. A regulation system is targeted on making self-discipline as the basis combined with appropriate government supervision.