Establishment And Change Of Financial Regulation

The purpose of this thesis is to describe, through an empirical study of a series of typical events in the history of financial regulation, the growth and nature of financial regulation throughout its 70 years development from its foundation in 1929-1933 by crisis till now, and to point out its significance to the theory of financial regulation and the practice of regulation's evolution.Regulation, deregulation and reregulation form the main clue of the history of financial regulation. This thesis provides a new interpretation for the clue. It indicates, contrary to the conclusion of many foreign and domestic researchers, that as the policy of government intervening the financial market, financial regulation is not weakening but strengthening.Total thesis constitutes four major parts:Part I: pre-history period of the financial regulation: regulation on domestic monetaryPre-history period of the financial regulation ended by the great depression. Before 1929-1933, government set up its financial intervention by stabilizing the function of monetary system and putting limitations on the banking entry. So the unitary money (federal reserve note) emerged in the financial market. This monopoly of issuing paper currency by central government and limitations of banking entry founded the modem financial systems of financial markets and institutes (including Fed).Part II: foundation and revolution of the financial regulation of marketsThe modem financial regulation systems established in and after the great depression in 1930s, with the goal to stabilize financial market by the restraints on the market activities of the financial institutions. Crisis created it and legislation patched it. In the 70 years development, it reformed twice: deregulation and reregulation. As the movement of financial liberalization, deregulation achieved by three stages: (1) elusion from the regulation; (2) simplification of the administrative organizations of financial supervision; (3) legislation on deregulation.Part III: the functionally regulation, or regulation on financial institutesIn 1980s and early 1990s, the failure in financial institutions' management was a very serious problem and a common phenomenon. It is the failure that forced the authority transfer its emphasis from the market to the financial institutes. Functionally regulation is the latest system of financial regulation.Supervision is the execution of regulation by checking and monitoring. More important, to differentiate financial regulation from financial supervision will help us to better understand financial regulation, especially in China nowadays.Part IV: the balance between supply and demand of financial regulationThe research of financial regulation supply forms the political theory of financialregulation and, the research of financial regulation demand forms its economic theory.The key point of financial function stabilization is the balance between supply and demand, that is, the change in supply factor follows that of demand.