Research On The Legal Regulation Of Negative Competition In Financial Regulatory

Regulatory competition refe rs to a serious of activities launched by supervisory subject for the purpose on expanding regulatory scope and gaining more regulatory resources,which is intended to surmount the relevant departments' power.Institutional diversity of financial regulations and complexity of regulatory system as well as the scarcity of supervision resource constitute the phenomenon of competition of financial regulation.In china,active competitions grow in tandem with the negatives.In terms of the active competition,“the conflict between Baoneng Group and Wanke ”,which finally has been successfully solved through central financial regulatory coordination,can be regarded as an active model.However,dues to various causes,financial regulatory competition often occurs in negative forms in C hina.According to the theory of specialization and decentralization and balance,the containment and interaction of power should have produced active effect on improving the efficiency of regulation.However,as we see in practical terms,the differences between supervisory subject's regulatory targets and strategies driving by different interests result in disorders in the competition,frequency passive competition and low efficiency of regulation.Therefore,the thesis is surrounded with the analysis on negative competition of financial regulation in China.Wrestles in asset securitization,coordination disorder in stock market regulation in 2015,disagreements between central and local governments in cleaning up local exchanges,local races on managing micro credit companies,the auditing and supervising game on cross-border listing companies between the U.S and C hina as well as the differentiation in implementation of Basel Capital Accord by countries,shows that,in d iversified and decentralized patterns of financial regulation,there are various kinds of competitions existing in regulatory institutions in different styles and levels.Differences between the race to the top,which raises the standard of regulation and the race to the bottom,tending to be financial deregulation,have been existing in company of each other for quite a long time,both of them have produced a seriously negative effect on the validity of financial regulation dues to the conflict and the lack of regulation associated with the difference of regulatory rules and levels.According to the discovery competition theory,though regulatory competition leads to problems,as regulatory conflicts and arbitrage,it still has positive side.It is a long way to improve China' financial regulatory system if we can full the advantage of regulatory competition through systematic design while the disadvantage of passive competition of regulation can be compensated by the benign interaction between regulators.Therefore,instead of completing negation of regulatory competition,we shall enhance the overall level of financial regulation so that we can see and take advantage of its potential value.With no solution solving all problems,we need to ground ourselves on the current situation to explore a way with Chinese characteristics when looking at and handling financial regulation.The appearance and features of competition of financial regulation show that it's highly linked with China's political and economic environment as well as international status.To some extent,falling to make clear positions to different level's regulatory institutions and lacking of scientific power allocation with good order arrangement,as well as lacking powerful status in international financial regulation compose the core parts of the phenomenon of passive competition of financial regulation in China.Maintaining the order of regulatory competition and normalizing competition activities of great importance to ensure advantages of regulatory competition system can be brought into full play.It's advocated in this thesis that “free development” and “rational management” should be combined together to set up an order of “diversity” and “variety” with legal confirmation regulation and protection,which can provide a sound and lawful institutional arrangeme nt for reducing frictions and boosting cooperation and interaction between regulators.Under such a multicenter order,China's financial regulation system can achieve a sound development.Five chapters are included in the thesis as following:Chapter One refers to the description on financial regulatory competition's basic theory.First,given by present theoretical research,we can conclude that financial regulatory competition can be both “active” and “passive”,marking with neutral characteristics,and “the binary conformation”,specified as “free development” and “rational management”,serves as the supporting theory for upgrading the financial regulatory competition.It can also provide an objective explanation for regulatory competition's state and order by legal control.Second,assuming scarcity of human rationality and natural resources as causes for financial regulatory competition provides an explanation for such phenomenon and points the way to relevant order's construction and legal regulation.Third,analysis of financial regulatory and competition's scope,mode,manner and strategy,offers a basic logic to study all kinds of regulatory competitions.Fourth,pros and cons reflected in the cost and benefit analysis gives the basis of how to transform “conflict” into “competition” and “cooperation”.Fifth,this part tends to interpret the importance of analyzing China's financial regulatory competition's type and the criterion of classification.Chapter Two is on the basis of investigation into phenomenon of wrestle and disorder in central institution of financial regulation.Through the comparative analysis of three series of current rules of asset securitization regulation,it reveals differences and conflicts during the process of drawing up related laws by central institution of financial regulation.It also exposes the low efficiency of financial coordination mechanism in stock market regulating in 2015.All the above consider the overlapping functions,excessive pursuit of departmental interests and the influence of industrial capture as the major causes for passive competition.Chapter Three focus on analyzing phenomenon of “central-local” game and local races in financial regulation.Regulatory game between central and local government was first open to the public after several times of cleaning up local exchanges;comparing micro credit companies throughout the country indicates local races in financial regulation.All the researches remind us that local institution of financial regulation fails to give a clear position and nature about themselves while the central lacks of specific and targeted policies.The malfunction of regulatory power's vertical disposition stands a main reason for passive competition between the central and the local.Chapter Four gives an analysis on the regulatory competition in international financial regulation where China involved in.The analysis is based on the auditing and supervising cases of Sino-U.S cross-border listing companies and the investigation of Basel Capital Accord's evolution.The analysis shows that the financial battle between countries,offending and defending of national financial sovereignty,the informality of international financial organization and soft laws in financial standard around the world plat the important role in passive competition of financial regulation.Chapter Five is about the systematic design.Reshaping the current competitive order which helps to transform from disorderly competition to healthy competition and cooperation has significance in taking advantage of regulatory competition mechanism with all passive competitions being eliminated.First,the political and economic environment should be taken into full account,we can learn from the idea of twin peaks model and functional regulation about central financial regulatory pattern to settle the disadvantage in regulatory competition and enhance its efficiency while avoiding regulatory arbitrage and conflicts.In addition,layer-regulation mode could be applied in the central and local.It means that the central government attaches importance to prevent systematic risk while the local emphasis supervising financial institution market behavior and financial service in the zone.The twin peaks and double regulation model not only serves as a right way to offset defects of separated supervision,but also accurately bring the advantage of specialization of regulation and decentralized and checked-and-balanced power into full play,as well as remove the risk of single regulatory mechanism.In second place,legislation,organization of regulating departments and information communication platform is necessary to improving the efficiency of financial regulation;In third place,optimizing local governments' right of property and administration,transforming governmental functions and improving government performance examination is the way to manage “race to bottom” competition.Also,we shall improve coordinating system of cross-border financial regulation and C hina's international position in relevant filed.A formal,legal and independent international organization of financial regulation with great executive ability and a feasible international financial standard can ensure financial regulatory institutions around the world complete healthily.Finally,we shall put a high value on anti-monopoly law and judicial restriction system as well as industry associations and public supervising mechanism to regulate competition through diversified outside forces.