The Development Of U.S.Financial Regulatory Framework After The 2003 Fincial Crisis

This paper first reviews the changes in the US financial regulatory system and the characteristics of each era.In a nutshell,the financial regulatory system has undergone a process of "freedom-regulation-relaxation-re-regulation".Before the financial crisis,the US financial regulatory system experienced three periods,first,the era of free competition and less regulation(before the 1930s);Second,the era of the separation of business operations as well as their oversight(1929-early 1970s),third,the era of mixed operations and a "double-headed"regulatory mechanism.Furthermore,this paper deeply analyzes the reasons for the outbreak of the subprime mortgage crisis,and the changes and defects of the US financial supervision before and after the crisis.Before the crisis,the functional structure of the US regulatory system fell behind the organizational structure;financial supervision lags behind the development of the financial industry;and the overlap and lack of financial regulatory supervisory entity.In response to the financial regulatory defects exposed in this financial crisis,the then US President Barack Obama issued the historic reform of the Dodd-Frank Wall Street Reform and Consumer Protection Act in July 2010.The act is known as the most comprehensive and stringent financial regulation since the 1930s,and it covers almost every aspect of the financial sector.This Act expands the Fed s regulatory authority and scope,including non-traditional financial areas that were not previously strictly regulated,and established new institutions within the federal government to strengthen macroprudential supervision of systemic risk in financial markets,systemically important financial institutions,and the OTC derivatives markets.It also enhances the micro-prudential supervision of hedge funds,investment banking and over-the-counter financial derivatives in order to enhance consumer protection.This paper discusses the significance of the Act from three aspects:strengthening systemic risk supervision,filling the regulatory vacuum,and consumer protection.Finally,the paper analyzes the how China could learn from the development of the US financial regulatory system.The history of China's financial regulation can be traced back to the establishment of the People's Bank of China at the beginning of the founding of New China.With the reform and opening up and the Third Plenary Session of the 14th Central Committee,the financial regulatory system finally realizes the separation of business operations in terms of oversight.China's financial supervision is not perfect.Main problems include excessive supervision of the securities market,partial supervision vacuum,inadequate systemic risk prevention and macro-prudential supervision,and lack of financial consumer protection.In response to these problems,this paper proposes to adjust the relationship between the government and the market,strengthen macro-prudential and systemic risk prevention,strengthen financial consumer protection,and coordinate financial innovation and supervision.