Legal Issues of Financial Regulation under the Trend of Financial Globalization

Author: He Xiaoyong
Publisher:
Publish Date: 2002-11-01
Features: This paper is divided into eight chapters. Chapter 1: The Legal Characteristics of Financial Globalization and Its Impacts. Chapter 2: The Legal Causes of the Asian Financial Crisis and the Features and Trends of Current International Financial Regulatory Legislation. Chapter 3: The WTO Financial Services Trade Legal System and China's Financial Regulatory Legislative Framework. Chapter 4: Risk Regulation of China's Banking Sector Opening. Chapter 5: Risk Regulation of China's Securities Industry Opening. Chapter 6: Legal Issues in the Regulation of Financial Conglomerates. Chapter 7: China's Risk Regulation of International Capital Flows. Chapter 8: Conclusion—Creating a Sound Rule of Law Environment to Safeguard Financial Security. This paper can be divided into three parts. In Part 1, the author first summarizes and proposes the legal characteristics of financial globalization, arguing that financial globalization is the convergence of financial legal concepts among countries and regions. This convergence of legal concepts gives the economic phenomenon of financial globalization a qualitative stability. Therefore, China's integration into financial globalization is inevitable. The author then analyzes the characteristics and trends of current international financial regulatory legislation. Subsequently, the author examines the distinct legal features of China's financial opening after its entry into the WTO. The prudent regulatory measures stipulated in GATS of the WTO have laid an international legal foundation for China to maintain national financial security during its financial opening. In Part 2, the author argues on the risk regulation issues in China's banking sector, securities industry, international capital, and financial mixed operations, proposing many specific countermeasures. For example, the author suggests that more prudent market entry standards should be rationally and flexibly stipulated, and corresponding restrictions on foreign financial institutions entering the Chinese market should be set in line with WTO regulations; during the transition period, the competitiveness of Chinese banks should be enhanced. The fundamental legal measure is to thoroughly reform and strengthen Chinese banks according to industrial and modern enterprise systems, and to improve the transparency of financial information. The regulation of the securities market should establish a legal mechanism that fully leverages the role of market supervision. The traditional indicator system for foreign debt management should be appropriately revised and supplemented, linking the total foreign debt, the amount of principal and interest repayment in the current year, and the amount of short-term foreign debt to the national foreign exchange reserves. Regarding China's financial regulatory system, in the short term, while maintaining the existing three-tiered regulatory framework for separate supervision, attention should be paid to the coordination mechanisms among the three financial regulatory agencies. In Part 3, the author analyzes the comprehensive indicator system for judging financial risks and concludes that China's financial situation is relatively safe, but some risks must be given high attention. Given the broad scope of finance, safeguarding national financial security and preventing financial risks is not just a task for the financial sector but requires comprehensive reforms in coordination, including state-owned enterprise reform, investment and financing system reform, and the establishment of a social credit system. The paper consistently upholds a central argument: China's current financial regulation must adapt to the needs of its integration into financial globalization, and financial regulation must be effective. While emphasizing government regulation, the role of market supervision must also be fully leveraged. Financial regulation must balance financial security and financial efficiency. Some views and suggestions in the paper can serve as references for financial regulatory authorities.