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Indexed by:会议论文

Date of Publication:2017-01-01

Included Journals:CPCI-SSH

Page Number:64-68

Key Words:Capital Account Openness; Financial Stability; Principal Components Analysis; Cointegration Test

Abstract:This paper investigates the relationship between capital account openness and financial stability from 1998 to 2015, and inspects some advice that has profound guiding significance for capital account opening. First, we construct FSI (financial stability index) with principal components analysis, which is based on four dimensions, microcosmic financial institutions, medium financial market, macroeconomic operation and external risk. Then, we adopt the VAR and VECM model to study how capital account openness affects financial stability, and focus on capital subaccount openness's effect, including FDI and security investment openness. The findings prove that capital account openness is beneficial to financial stability. Especially, FDI openness is positive to financial stability, while stock investment openness is negative to financial stability. What's worse, it can cause the accumulation of financial risk. Therefore, we should be cautious about the openness of security investment.