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Research On Supervision Of Credit Default Swap In China Through "AIG Crisis"

Posted on:2018-02-02Degree:MasterType:Thesis
Country:ChinaCandidate:S X FangFull Text:PDF
GTID:2336330512481464Subject:Economic Law
Abstract/Summary:PDF Full Text Request
The loophole which was buried in the US financial regulatory system deeply had been exposed out with the outbreak of the financial crisis in 2008.This ruthless blow had not only made the US financial market into the frozen periodinstantly,but also divorced the various types of financial derivatives from the unregulated zone to the important area in the financial supervision system after financial crisis.Until now,the financial sectorunanimously agreed that the fuse of financial crisis is financial derivatives like credit default swap(CDS)which had been overused in the financial transactions.A famous movie "The big short" was based on a real story about several investments in Wall Street dignified in 2007 before the US credit stormthroughshorting CDS and got benefits from credit crisis.Although CDS was produced and widely used in Europe and the United States,CDS become more attractive in China's financial market with the development of China's financial derivatives market.Especially in the September 23,2016,China Inter-Bank Dealers Associationpublished the document in order to guide CDS transaction in our financial market.It marks the long-awaited Chinese version of CDS had officially landed.It also means the importance and urgency of improving credit default swap legal supervision in our country.China's credit default swap is still in the initial stage of development,the structure of CDS product is also very simple and the real credit risk accidents has not occurred in practice.But in the international financial markets,CDS caused lots of large-scale and far-reaching cases,which alarm our country to strengthen the CDS regulation.To some extents,regulating first can provide better environment to make CDS develop faster and better.Based on the turmoil in the financial crisis,this paper tries to discuss about the further improvement of CDS's legal supervision system in our country with the current situation through knowing theregulatory innovation after financial crisis which happened in the United States.This paper is divided into three parts,including the introduction,the body and the conclusion.The body part involves four chapters.The first partintroduces a famous case about American International Group(AIG).In 2008 financial crisis,the US insurance giant AIG had been dragged to the brink of bankruptcy step by step in the reason of overusing CDS.The only way for AIG is waiting for the help from US government.This case can give a general description about the risk of credit default swap to you.The second part mainly divided into four chapters.The first chapter introduces the basic concepts and characteristics of financial derivatives and credit default swaps,clarifies the trading mechanism and the legal nature of credit default swap,affirms the contract of credit default swap and financial derivative products The basic attributes for the following credit default swap legal supervision and the financial product regulating legislation mainly follows the "contract law" and laid out the theoretical basis.The second chapter is talking about the developing process and the current situation of credit default swaps in China,analyzes the CDS from the credit risk mitigation tool to the Chinese version of CDS which was established in September last year.And with the improvement,there are still existing some problems in relevant regulatory laws and regulations.The third chapter introduces the supervision of the US credit default swap after the financial crisis,combined with the case of AIG.Analyze the problems in the crisis about credit default swap and the innovative initiatives which US financial regulators has taken in the US financial regulatory after crisis.In the fourth chapter,this paper puts forward the corresponding measures to resolve the problems existing in the credit default swap regulation,based on the introduction of American credit default swap.Finally,the concluding part of this paper a:ffirms the neutral nature of the credit default swap,and emphasizes the importance of both regulation and development.In current financial market,we need to encourage the promotion of international exchange about credit default swap regulation.
Keywords/Search Tags:Credit default swap, Credit risk, Financial crisis, Financial supervision reform, Legal supervision
PDF Full Text Request
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