The Building Of China’s Macro-prudential Supervision Law Framework

The outbreak of the global financial crisis made all countries realizethat, in the complex financial system, the effective supervision ofindividual financial institution can not adequately guarantee the securityand stability of the entire financial system and one of the roots of thefinancial crisis is the lack of macro-prudential supervision. After theoutbreak of the financial crisis, the United States, the European Unionand other developed countries transferred the center of gravity of thefinancial supervision to maintaining financial stability, establishing theconcept of macro-prudential supervision and preventing systemicfinancial risks. On the basis of a profound reflection of traditionalfinancial supervision system defects, these countries adopted a series offinancial supervision reform measures. These measures to some extentreflect the future direction of the reform of global financial supervisionand will have a profound impact on global financial markets.In recent years, China’s economy develops rapidly and theeconomic aggregate ranks second in the world. China has implemented aseparated supervision regime in long-term under the guidance of theconcept of the traditional micro-prudential supervision. It has played apositive role in maintaining the healthy development of China’s financialindustry, but there are still some shortcomings. The micro-prudentialsupervision can not effectively prevent and mitigate systemic financial risk, so China need to implement effective macro-prudential supervisionto protect the stability of the financial system. Therefore, the introductionof macro-prudential supervision concept and building the legalframework of China’s macro-prudential supervision has becomeimperative.Firstly, by introducing the evolution of macro-prudential supervisionmeaning and the characteristics of the macro-prudential supervision incontrast with micro-prudential supervision, building the legal frameworkof macro-prudential supervision is the only way to prevent, resolvesystemic financial risk and maintain the stability of financial system.Then the article examines the development process of the United States,the European Union macro-prudential supervision legal system, studiesthe effectiveness of their financial reforms, on the basis of combing thehistory of China’s financial supervision system and analyzing theshortcomings of macro-prudential supervision legal present situationunder China’s financial supervision system, learns from the advancedexperience of the financial reforms in the United States and the EuropeanUnion, introduces the concept of macro-prudential supervision andadvices building China’s legal framework of macro-prudentialsupervision. At last to the conclusion, People’s Bank of China should bethe legal subject of China’s macro-prudential supervision. People’s Bankof China as macro-prudential supervision institution has clear legal responsibilities of coordinating macro-prudential supervision andmonetary policy, monitoring, warning and dealing with systemic financialrisk, perfecting financial supervision coordination and cooperationmechanism and innovating macro-prudential supervision tools tomaintain China’s financial stability.