Study On Trans-national Legal Supervision Of Financial Swaps

Financial swaps are currently one of the main sorts of financial derivatives, having a substantial influence on world finance or even the entire economy, for the reason of which they shall never be underestimated or neglected. The characteristics of financial derivatives such as the huge sum of transaction, high‐leveled potential risks, complicated re‐derivativity, profound international, produced a new research topic to the lawmakers and experts in the domain of international financial law, which is to create a systematical supervision regime thereon. Nowadays, the legal system on financial swaps consists of the domestic supervision as the primary and the international cooperation as the supplementary. With regard to domestic supervisions, the systems of the United States and the United Kingdom are relatively mature and developed. On the other hand, these two systems are of substantial difference and both have its own pros and cons. With reference to the international supervision, the organizations such as Basel Committee, International Organization of Securities Commissions, International Swaps and Derivatives Association, with the documents they have released in the last decades, which have been currently taking effect, will play a more important role in the international supervision of financial swaps.However, the2007subprime crisis of the United States and the2011sovereign debt crisis of Greece reflected the great problems of supervision of the financial swaps. Therefore, it is necessary and practical to study on the way to improve the legal system thereof, especially by means of strengthening the international cooperation of supervision.This paper analyzes the problems of the transnational supervision of financial swaps on the basis of historical events, comparative study, theories and practice as a whole, dialectics, which can be divided into three parts:Part One (The evolution of international financial swaps) uses the method of historical analysis. First, it makes clear the concepts, classifications and functions of international financial swaps. Afterwards, it reviews the history of the development of financial swaps and, by analyzing influential financial crises happened for the past few years, leads the issue of this paper into discussion.Part Two (The current legal system of financial swaps),from both international and domestic respect, picks out several key international organizations relevant to this field and the domestic legal systems of the United States and United Kingdom to study, and tries to discover the advantages and disadvantages thereof by comparative analysis.Part Three (The proposals to the transnational legal system of financial swaps), by means of theories and practice as a whole and dialectics, puts forward the proposals related to enactment of domestic legal systems of financial swaps, as well as at the international level to reinforcement of the cooperation among the countries, and an efficient, wide‐accepted international supervision system of financial swaps to be established in the future.