Study On Legal System Of Systemic Risk Regulation And Supervision Of Modern Investment Bank

The early investment bank is a security intermediary in nature because of its business structure, so the investment bank had been regulated as the stock brokerage company in the traditional financial regulation and supervision. Protecting investors is the primary goal of regulator and preventing systemic risk is not regulator's major task in the traditional investment bank regulation and supervision. The modern investment bank has become a systemic important institution because of the change of its business structure, and therefore preventing systemic risk should been the prominent object of investment bank regulation and supervision.In order to prevent systemic risk, the idea of macroprudential supervision and functional regulation model should been established and preventing systemic risk should be intended as the prominent object of regulation and supervision during the construction of legal system of systemic risk regulation and supervision of modern investment bank. Besides, the orientation of supervision system reform should been established single supervisor institution and risk based supervision model so as to prevent systemic risk effectively. The construction of legal system can be divided into following stages. Firstly, the regulator must insist on market access regulation and supervision to prevent risk from the origin. Secondly, it is essential to improve the market exit mechanism for investment bank, such as set the relief fund and special insolvency proceeding in order to minimize the risk expand and systemic risk. Thirdly, the regulator can introduce capital sufficiency rate in order to control the risk exposure in investment bank and improve its risk-resisting ability. Finally, the regulator should strengthen the OTC market regulation, enhance corporate governance for investment bank and repair the regulation leap in the financial market.