Financial Regulation Reform In The UK

There is no doubt that financial market tremendously drives economy moving forward, creating trillions of fortune for the society. However, several negative effects also arise from it. The most notorious one in recent years is the 2007 sub-prime crisis, first in the States and then the whole world. The losses and damages that the economy suffered are immeasurable. The new characteristics of the financial market should take a major responsibility to the crisis. Therefore, the need for creating an efficient and effective regulatory regime to make sure a well-functioning financial system is just in demand. The UK is taking the lead in this area. Hence, this article analyses the specific approaches to reform the British financial regulatory regime and makes some suggestions to the Chinese system.There are five parts in the article. First, it is the introduction to the regime after 1997. The UK made a great progress in changing the financial regulatory system, establishing a new authority- the Financial Services Authority-as the only regulator in the financial sector. Financial Services and Markets Act 2000 provides legal objectives and powers to the FSA. Nevertheless, the seemingly perfect system has flaws in enforcement and coordination, worsening the 2007 crisis to some extent.Secondly, the Banking Act 2009 is of great weight in building the new regime. There are three major measures, preventing bank failures by enforcing financial stability, dealing with failed banking institutions through Special Resolution Regime and protecting depositors by Financial Services Compensation Scheme.Thirdly, there are some other aspects of the reform, such as the enhancement of the FSA, regulating the systemically important companies and concentrating on the systemic risk. Fourthly, the participants of the financial sector in the UK responded to the reform quickly and gave specific responses to each question.Finally, the last part is about suggestions to the Chinese regime from the UK's experience. It does not matter which model that china will take, so long as there is a clear principle, a well-developed legal regime and cooperation and coordination amongst different authorities.