U.s. Financial Regulatory Reform. Sub-prime Crisis And The Implications For China

After the sub-prime mortgage crisis broke out, the Obama administration of the United States realized the various problems with its financial regulatory system and determined to implement a large-scale reform, which is reflected in the Financial Regulatory Reform-A New Foundation (the white paper) released in 2009.From the background of this financial regulatory reform, we can see that regulatory blanks and the loosening of regulations, together with insufficient consumer and investor protection, are the regulatory reasons resulting in the crisis. To remedy the holes in the system and protect the financial industry from further crises, the reform white paper suggests promoting robust supervision and regulation of financial firms, establishing comprehensive regulation of financial markets, protecting consumers and investors from financial abuse, providing the government with useful tools, raising international regulatory standards and improving international cooperation. This recommendations efficiently solve many existing regulatory problems, and have made advancement in several areas. However, the white paper still needs to be improved.Nowadays, China's financial industry is developing toward a more integrated and complicated ways of operation. At the mean time, China's financial regulatory system has not experienced much change and is still regulating banks, insurance companies and security companies separately. Therefore, China's financial regulatory system should adapt to the changes in the industry and make appropriate reform in time in order to realize the financial regulatory goals of reducing systematic risks and promoting the healthy and orderly development of the financial market.