Financial Innovation And Financial Regulation Studies

Financial services play an increasing prominent role in the economies of all developed and developing nations. In 2008, a deep financial crisis swept all over the world, bringing out a global economic recession and social crisis. The question being asked with more frequency and greater urgency is should we fear or embrace financial innovation? China has chosen the latter. In order to avoid or, at least, to minimize the effects of financial risk and keep safety and soundness in financial system, it is urgent for China to learn lessons from the setback and improve its financial supervisory system on rule-oriented base, which is the purpose of this thesis.Financial innovation is the breakthrough of financial deepening. As a measure of control, financial regulation can not only promote but also restrain the financial innovation. Different kinds of financial innovations demand different financial regulations. The"game"-the interplay of the financial innovation and regulation promotes the development of financial industry simultaneously. Chinese regulators should focus on strengthening the core competitiveness and risk management abilities of Chinese financial institutions. Specifically, encouraging financial innovation should still be the mainstream policy. The thesis analyzes the developments of the financial laws and regulations of China, in particular the measures and policies that the government and administration of China adopted in the global financial crisis aimed at strengthening financial supervision and legislation to resolve certain difficulties arising from the crisis.