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A Comparative Study on the Financial Regulation Reform of Relevant Developed Economies(No.112, 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.112, 2017 (Total 5187) 2017-9-7

Abstract: This paper analyzes the financial regulation reforms of the United States, the European Union, the UK and Australia after the international financial crisis and the impact of their reforms. These economies have respective characteristics. For instance, the United States focused on the adjustment of regulatory power and the supervision of financial institutions, while Europe, Australia and some other countries laid stress on the division of labor and coordination in the prevention and disposal of systemic risks, with accountability resting with supervisors and executives of financial institution. In terms of specific concepts about preventing systemic financial risks, the division of responsibility and the coordination of regulation should be strengthened. There must be institutions responsible for macro- and prudent regulation, focusing on the prevention, control and disposal of systemic risks. They should be entrusted with proper responsibility and authority to play the leading role in coordination, and they should make timely collection of the data of financial transactions and analyze the market performance. In addition, the government should strengthen the effective supervision over the behavior and performance of the regulatory institutions. Generally speaking, the financial departments perform the duties of supervision and assessment on behalf of the government to review important policies, while in some cases the rights of nomination are granted to the financial departments for the appointments and removals of the heads of those regulatory institutions. This is why the Financial Stability Board is generally chaired by the Minister of Finance. These facts make good reference for China to flesh out financial regulation institutions and improve the supervision performance.

Key words: financial regulation, reform, impact, comparative