Regulatory Arbitrage In Asset Management Business Of China's Commercial Banks And The Application Of Proportionality Principle

Maintaining financial stability and preventing systemic risks has become the themes of China's deepening financial regulatory reform.At the same time,promoting the vigorous development of China's financial industry and encouraging financial innovation is also a key issue in China's financial supply-side reform.The existing rule-regulation model has lagged behind the pace of financial innovation,and regulatory arbitrage has occurred frequently.The academic community has conducted a profound analysis of the hazards of regulatory arbitrage.Most believe that various methods should be tried to overcome regulatory arbitrage.However,the author believes that financial innovation and financial supervision are inevitable and will always be in a dynamic game,so arbitrage will not be eliminated or contained.Moreover,proper regulatory arbitrage can stimulate the development of financial markets.How to balance regulatory arbitrage and financial regulation is the issue that should be considered in the legal regulation of financial innovation supervision.China's academic circles and practical circles have not yet reached consensus.The principle of proportionality is an instrumental principle in the field of public law.Its complete logical framework and equilibrium concept are favored by the supervisory authorities of most'countries.Nowadays,it also presents an interdisciplinary application trend.After the financial crisis,in order to repair the huge losses caused by the crisis,optimize the regulatory framework,and promote a stable economic recovery,western countries have launched a heated discussion on the integration of the principle of proportionality into financial regulation.They have gradually implemented the field of banking regulation in the domain,but in China little research has analyzed the feasibility about the application of proportionality principle to financial regulation.In view of the fact that China's financial market is characterized by the indirect financing system dominated by commercial banks,other financial institutions and non-financial institutions basically carry out business activities around commercial banks,and financial risks tend to be highly concentrated on banks.The author combines the trend of China's current financial regulation from rule-based to principle-oriented,and explores the feasibility of integrating the proportionality principle into the banking supervision rules,to balance the contradiction between arbitrage innovation and financial regulation,and promote the sustainable development of financial innovation.On April 2018,the promulgation of the programmatic document on"Guiding Opinions on Regulating Asset Management Business of Financial Institutions"(AMFI)marked the official opening of the regulatory transformation of China's financial institutions'asset management business.Therefore,the author wants to focus on commercial bank asset management business,and explore the feasibility and specific path of the integration of the proportionality principle into the asset management business regulation mainly from a macro perspective.Chapter One is the conflict between the regulation and the regulatory arbitrage of commercial banks' asset management business in China.It is mainly divided into three parts,one of which introduces the definition of regulatory arbitrage,and the second is the analysis of the main mode of regulatory arbitrage,and the third is to analyze nearly 400 departmental rules of the official website of the China Regulatory Commission in 2004-2019,and extract information with a view to clarifying the escalation of arbitrage innovation and the intimate promulgation ofregulations by the regulatory authorities.Chapter Two is the legal analysis on how the principle of proportionality applies to the regulatory rules of commercial banks'asset management business.There are three main contents in chapter two.Firstly,I want to introduce what the proportional principle is and its evolution history.Secondly,from the value level and the public law attribute,the intrinsic value of proportionality principle is in line with the demand on regulation of bank asset management,that is,the principle of proportionality has the intrinsic value of"balancing the conflict between public interest and private interest,\while the supervision of bank asset management has the demand of balancing between supervision and regulatory arbitrage;subsequently,the"fourth-order"framework of proportionality principle is introduced,so is the limitations applicable to banking regulation.Chapter Three is the survey on application of the principle of proportionality to regulations for commercial banks'asset management business,intercepts the AMFI and subsequent implementation rules issued by the CIRC,the author conducted statistics,and analyzed the new regulatory system under the principle-oriented regulatory supervision,then deconstruction and concrete analysis of the articles in AMFI on prohibiting regulatory arbitrage from the two dimensions-principle-oriented and rule-based,to demonstrate the regulatory arbitrage may not be treated proportionally.Chapter Four is about the extraterritorial experience of proportionality in banking regulation,to learn the way to balance the regulation and arbitrage innovation.The author refers to the reports from the EU Banking Regulatory Bureau,the UK Financial Conduct Authority and other database to sort out how they applied the proportionality principle into banking supervision,that is,the EU begins with the revision of the upper law,and the UK authorized three types of license tags,each of which has specific capital requirements and specific scope of business,and the United States is based on bank classification supervision.Chapter Five is about the specific application of proportionality principle in the construction of commercial banks' asset management business regulation,which is mainly proposed from the principle and rule level,that is,the principle ofproportionality should be legislated.The rules level is driven by external forces and internal forces:the external force is promoted from the perspective ofbank supervision,which would propose innovative banking classification regulation system for moderate supervision,and also propose to improve the information disclosure system and warning arbitrage risk from the perspective of social supervision;the internal force is driven by improving the corporate governance system and guiding the bank to review the arbitrage potential risk.Therefore,it is concluded that the principle of proportionality is applicable to the supervision of commercial banks.