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The governance mechanism of new rural financial institutions: An analytical framework based on game theory

Hongyu Li, Zhiqiang Lu

Base on the appearance and actuality of new rural financial institutions, this paper describes its problem, and use game theory to analyze the cause of the problem. This paper points out that the cause of the problem is the governance of monitor corporate behavior is irrationality, which is executed by China Banking Regulatory Commission (CBRC). Secondly, the paper uses Prompting-Behavior-Aim model construct a new governance to solve the problem of prompting. Finally, the paper points out some advices on the new governance mechanism.