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Title:: Demand-Side or Supply-Side：Law and Economics in CostReduction of Credit

Keywords:: credit financing; rule of law; supply-side reform; economic analysis

Abstract:: The fundamental solution to the problem caused by the fact that it is difficult and costly for smalland medium-sized enterprises to obtain financial support lie in the improvement of the legal environmentwhere banks can make sound credit decisions and the promotion of effective supply of credit resources. Ruleof law in the credit market is the crucial path to cost reduction concerning credit supply. Cost reduction inthis regard involves reducing the costs produced by financing mortgage，credit mismatch，loan maturity andcredit matching. The purpose is to realize the effects of credit scale，resource allocation and innovation. Thepromotion of supply-side reform is intended to push forward with the rule of law to create a better financialecological environment，credit system and governance system of financial institutions. The building of a lawbasedframework governing the financial supply-side will help reduce the cost of obtaining credit.