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The Adjustment and Impact of America’s Financial Regulatory Concept around the Global Financial Crisis(No.111, 2017)


By Zheng Xingchen, Research Team on “China’s Banking Sector’s Transformation during the 13th Five-Year Plan Period”, Research Institute of Finance, DRC

Research report, No.111, 2017 (Total 5186) 2017-09-07

Abstract: In view of the evolvement of America’s financial regulatory laws around the subprime mortgage crisis, it could be found that America’s cross-sector operation and the financial innovation such as the canceling of over-the-counter (OTC) derivatives are in fact conducted along with regulatory relaxation. Such relaxation does not mean the optimization and adjustment under the controllable framework of systemic risks. Rather, it is the passive response to the high-speed expansion of mixed assets driven by the profit-pursuing act of financial institutions. The subprime mortgage crisis has exerted a major impact on America’s financial regulatory concept, which has focused on preventing systemic risks and protecting consumers’ interests. Besides, it has also introduced strict stipulations on preventing systemic risks, regulating OTC derivatives, restricting moral risks and making coordinations among regulatory institutions. But generally speaking, the labor division and coordination mechanism among regulatory institutions has not been truly rationalized, the internal restrictive mechanism to prevent systemic financial risks is yet to be perfected, and the profit-driven momentum and influence on policies of financial interest groups are still profound which even push forward the amendments of rules and regulations to ease the restrictions on them.

Key words: regulatory reform, subprime mortgage crisis, concept adjustment, impact