Strategies and Priorities for Financial Regulation Reform in China Discussed by China's Economy & Policy-Gateway International Group14 Mar 2012 • by Natalie Aster
In recent years, the financial regulatory system in China has been enhanced, often by absorbing relevant aspects of the U.S. model, but there are still some defects to be addressed. Since the financial crisis, the American government has taken steps to reform U.S. financial regulation. China should learn from the experience of these reforms, and, based on its own conditions, make further improvements in its own financial regulatory system.
New analysis “Strategies and Priorities for Financial Regulation Reform in China” by China's Economy & Policy-Gateway International Group indicates that a regulatory system should be established based on the development stage of the corresponding financial market, with a focus on the existing obstacles and problems, so as to reduce financial risks. But, it is also necessary to be forward-looking when establishing a financial system in order to be aware of the evolution of risks and the future institutional needs. In this way, the financial system can be appropriately structured to reduce the costs of institutional transition and friction. Despite the significant differences in initial conditions and constraints in China and the U.S., and the wide gap between the financial systems and development levels of the two countries, the experience and lessons learned from the U.S. financial reform are worth referring to in planning the future of the financial system and regulatory reform in China.
Strategies and Priorities for Financial Regulation Reform in China
Published: February, 2012
Price: US$ 200,00
From a historical point of view, the previous reform of China’s financial regulation resulted in the problems of split regulatory authorities and an inadequate coordinating capacity, which has restricted the development of the financial market and the modernization of the financial services industry. In actual operation, the current coordination mechanisms at various levels are quite effective, however, other problems have been revealed, such as inconsistent policy stipulations from different departments, a regulatory vacuum, contradictory standards, and a lack of communication. In general, the current coordination mechanisms for financial regulation in China cannot ensure that the domestic financial industry, which has entered a phase of rapid development and is in the process of integrating into the international market, will be effectively regulated.
More information can be found in the report “Strategies and Priorities for Financial Regulation Reform in China” by China's Economy & Policy-Gateway International Group.
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