Institutional Structure of Financial Regulation in China: Lessons from the Global Financial Crisis

Abstract

In light of the recent global financial crisis, this article aims to critically examine China's financial regulatory structure and, based on the results of such examination, set out reform proposals for China. At present, China adopts a traditional sectoral system of financial regulation, which has exhibited several inadequacies in meeting the regulatory challenges in a rapidly changing market. In quest of a solution to the problem, a comparative analysis is conducted of the financial regulatory regimes in some advanced economies, including the US, the UK and Australia, each of which is representative of a distinct regulatory model. When looking to these overseas experiences for guidance, regard is taken not only of their objective advantages and disadvantages, but also of the local conditions in China. It is concluded that the US model merits consideration in the short term and, with the further growth of China's financial markets in the long run, the Australian model provides the preferred direction for reform over the UK model.