On The Legal Issues Of Global Financial Supervision Since The2008Financial Crisis

The2008financial crisis revealed problems that nearly collapsed the wholesystem, forcing the international society to reconsider the efficiency of the financialregulatory mechanism and the need for reform. Since the crisis, the U.S., the EU, andthe UK, along with other countries have passed their own bills in an attempt to form abetter functioning regulatory body. Meanwhile, the FSB, the IMF, the World Bank andthe Basel Committee worked together to come up with new international financialregulations, with the purpose to strengthen the regulation, supervision and practice ofthe post-crisis financial system. The governments and the international bodies have allformed fresh understanding of the importance of prudential regulation after the crisis,more and more countries are starting to adopt the rules set by the international bodies,the global financial regulatory mechanism is experiencing an all around reform.This paper aims to analyze the characteristics and legal effects of the globalfinancial regulatory reform, to explore the method of preventing the crisis fromworsening by improving the regulation, to propose the means of reforming the globalregulatory system, and to study the experience originated from the changes in othercountries and international bodies’ regulatory system that China can learn from.The introduction of this paper briefly introduced the concepts of financial crisisand financial regulation, it also illustrated that financial regulations are oftenoriginated from financial crisis and the2008financial crisis has led financial regulation into a new era.The first chapter focused on certain countries’ reforming financial regulationsystems, especially the ones in the U.S., the EU, and the UK. Since the financial crisiswas triggered by subprime lending in the U.S., its financial regulatory reform wasconsidered of highly importance, the chapter discussed its emergency responsemechanism during the crisis, the Dodd-Frank act, the too big to fail theory, theconsumer protection act, derivatives regulation, as well as rating agency supervision.Apart from the above, the chapter discussed the characteristics of the new financialregulatory system of the EU through the study of the de Larosiere Report. As theUK’s financial system has its own nature, the chapter also studied and commented onits financial reform plan.The second chapter discussed the cross-border regulatory cooperation throughthe discussion of the U.S. and the EU’s cross-border regulatory reform. Besides, thechapter also followed the FSB, the IMF, the World Bank, and the Basel Committee’sreform course to analyze the soft laws set by the international bodies. The FSBcoordinates at the international level the work of national financial authorities andinternational standard setting bodies, the IMF and the World Bank works to fosterglobal growth and economic stability, the Basel Committee set the standard for banksand provides a forum for cooperation on banking supervisory matters, all the aboveinternational bodies represents the core of the global financial regulatory system. Byadopting the new standards and rules set by the international bodies, the nationalfinancial authorities will be better aware of the improvements that need to be madethus better customize their own financial regulations.The essential cause for the financial regulatory reform is the financial crisis, thus,the analysis of the financial crisis and the crisis management mechanism is thefoundation for the study of reforming the global financial regulatory system. Chapter3analyzed financial crisis contagion upon which further argued the method to utilizefinancial regulation to minimize the contagion. Meanwhile, the chapter discussed thecrisis management mechanism through the study of sovereign debt restructuring andforeign financial institution bankruptcy theory. Government intervention has always been controversial when it comes to financial crisis regulatory problems, the chapterreconsidered its core impact on bailout and proposed related suggestions from thelegal perspective.Based on the analysis of the legal changing of the global financial supervision,the forth chapter rebuilt the framework of the global legal system of financialsupervision. By defining the supervisory operators, the article discussed the power offinancial supervision. The framework covered the promoting factor of rebuilding theframework of global financial supervision; the changing of the mode and functions offinancial supervision; the financial consumer protection system; and the cooperationbetween financial supervisory operators.The fifth Chapter mainly concerns about the enlightenment of global financialregulatory reform on China. The article inductive the concept of prevention ofsystemic risk in financial market and the financial consumer protection system.Meanwhile, the article raised several problems to be strengthened: The regulation offinancial innovation; disposal of shadow banking; regulation of financial holdingcompany; legal disposal to the crisis; the strengthening of self-discipline mechanismin financial supervision; establishment of the deposit insurance system; and theimprovement of financial dispute settlement mechanism.Last but not least, the article conclude the core idea of the whole article andlooking forward to the future of legal system of global financial supervision.In theory, the academia emphasized more on the research of reasoning of thefinancial crisis, but focused less on the legal system reform and the legal effect. And,the present study of global financial supervision based much on the perspective ofeconomic law, but not the perspective of international law. Therefore, the articlefollowed the "reform" as the main line, discussed the reform path of the legal systemof financial supervision, raised the certain innovative theoretical analysis on theproblem with the prospective of international law.From a practical point of view, the article discussed such problems assystemically important institution; credit rating agencies; the shadow bankingregulation, provided the practical significance of: dealing with the financial crisis; preventing financial risks; building the international supervisory framework;cooperating the financial supervision;.Although China isn’t the source of recent financial crisis, problems caused byregulatory failure still exists. By analyzing the legal reform of global financialsupervision, the article not only help to further improve and standardize the legalsystem of financial supervision in China, but also consolidate the legal status of Chinain the global financial market.