The Innovation And Development Of The Financial Regulatory System

As countries all over the world are undergoing great reform in financial regulatorysystem, the innovation and development of regulatory system is increasingly becomingour focus. Ever since 1970s each country (particularly developed countries) has experienceddramatic changes in financial industry. The borderline between different departmentsbecomes blur, giant financial cliques are constantly rushing out; Globalization offinancial industry are growing rapidly. These facts have brought great challenges to thefinancial regulatory authority. In order to improve the monitoring and regulatingcapacity, each country is upgrading its own regulatory ideas, employing advancedregulatory techniques and reforming its present system actively. Obviously, it is of greatsignificance for us to study the new trend of reform in regulatory system, draw on theexperience of other countries, and establish healthy modern regulatory systemconsistent with socialist market economy. Goodhart (1998) points out: 1. The financial regulatory system will influence theregulating efficiency and effect; 2. Monitoring and regulating institutions have differentdefinite responsibilities under different regulatory system. The regulating authority isgenerally faced with more than one goal. Unless the regulatory institution is clear aboutits responsibilities, we are able to handle the conflicting goals properly when differentgoals collide. 3. Difference in regulatory system may influence the direct and indirectcost of regulation. 4. Unnecessary intercrossing and repetitive regulation will affect theregulatory cost and efficiency. Different regulatory system displays different advantagesin dealing with the above problem. Evidently, it is theoretically significant for us tostudy the economic and financial regulatory system. Based on Marxist dialectical materialism and historical materialism, employingsystem and analysis theory and innovation theory, the current study attempts torationalize the economic and financial regulatory theory and practice. It uses logicalmethod, historical method, system analysis, comparison, generalization, etc. to explorethe innovation and development of the financial regulatory system. The present study isdivided into three parts: prologue, main body, and epilogue. In prologue, a brief introduction is given to the historical background, the presentsituation, and the significance of the study. The main body includes four chapters. The first chapter is a theoretical explanationof the innovation of the regulatory system. It employs the financial innovation theory ofavoidance, the regulatory institutions' life span theory, and the regulatory perfectiontheory respectively. It points out the internal requirements and external pressure of thedynamic process. This chapter analyzes the transformative process of regulatory systempractically and theoretically. The second chapter is devoted to the experience of the financial regulatory systemof innovation in Britain, Japan, European Union, and the U.S.A. Difference in socialeconomic system, historical and cultural traditions, and social political system of eachcountry result in the difference in its financial regulatory system. Similarly, the patterns,approaches, and contents of their innovation system are also different. But manysimilarities and common features can be found with regard to the changing tendency.Based on this point, this paper analyzes the changing characteristics of present financialregulatory system. The third chapter is a retrospect of the transformative process in China. Theshortcoming and imbalance of our regulatory system are analytically demonstrated. Interms of operating efficiency, our present regulatory system can not provide enoughspace for the development of the financial institutions microcosmically. Thus, theseinstitutions' capacity of making profit is seriously restrained. Macrocosmically, it isvery hard to optimize the collocation of resources, deepen our economic reform andpromote a healthy and sustaining development of market economy. In nature, ourpresen...