Theory and Practice on Lending Risk Control by the Government in the Song Dynasty

Lending was of importance in finance of Song Dynasty, and the government constituted strict laws and regulations to control the risk. Those measures had made great contribution to the sustainable financial market by maximizing the strengths of lending and lessening the loss of individuals and instability of society caused by bad loans. Nevertheless, there were many problems in the policy implementation that the officials violated the law and discipline. Thus, coordination should be made between soft constraint and hard constraint, which needs conditions to support (mainly the advance in scientific technology).