The Research On The Issue Of Financial Regulation In China

Finance is the core of modern economy. An advanced and effecive financial regulation system is crucial to market economy. An effective financial regulation is a guarantee for the stable and healthy operation of financial system; it can also promote financial innovation and avoid acculation of financial risks.In recent years, business in finance sector has become merged with each other since the fierce competetion and innovation among banks, security and insurance sectors. Now, insurance companies can invest stocks through funds; security companies are admitted to interbank money market; commercial banks are agencies of insurance firms. Integriation of business and innovation is helpful for the realization of economy of scale, decrease of cost of trade and increase of the edge of domestic financial institutions.However, this may also enhance the probabilty of risk and increase instablity of financial system. Therefore, it is necessary to set up a compatible financial regulation system, which calls for the improvement of China's financial regulation system. The current divided financial regulation mode should be gradually turned into mixed financial regulation mode, and finally an integrated financial regulation should be realized.The paper, beginning with generalization of financial regulation theories, compares financial regulation system of USA, Japan and UK to find out the general principle of the shift of financial regulation. It is then concluded that China's financial sector is bound to be mixed operation and that practical ways to shift is suggested too.In chapter one, the author discusses the concept, aim and context of financial regulation. Then he provides a general economics explanation of the necessity of financial regulation.In chapter two, the paper studies the historic change of financial regulation regime in USA, Japan and UK. It is found that financial regulation should be compatible with the development of financial system, and that financial regulation is strongly effected by the development of financial institutions etc. With the progress of globalization of financial regulation, there is a tide of united, integrated and open financial regulation in USA, Japan and UK.Chapter three focuses on China's practice of mixed operation and then discusses the relation of financial regulation and financial innovation, and puts forward requirement of financial regulation regime design, that is, to reinforce prospective, to encourage effective financial innovation and to set up a regulation mode considered inner and outer situations.In chapter four, with China's practice considered, the author generalizes the aim and rules for the improvement of financial regulation system, and puts forward the path for financial regulation innovation.