Financial Market Regulations in Post-financial Crisis Taiwan: Focusing on Financial Derivatives
Date Issued
2015
Date
2015
Author(s)
Kuo, Yen-Tung
Abstract
The global financial crisis during 2007-08 revealed the deficiency of regulations for financial markets. After the crisis, the deregulation policy, the loopholes in existent regulations, and the dysfunction of competent authorities were criticized and that many international organizations and countries begun to modify the regulations, especially those for financial derivatives which is blamed for the occurrence of the crisis. Comparing to other legal domains, the soft laws established by international organizations are often adopted and thus the modification in different jurisdictions are similar to some extent. Under the consideration of reducing the impact of the systemic risk to financial system, the governments tend to extend the coverage of regulations to more financial derivatives, centralize the trading in OTC market, increase the requirements for financial institutions, and enhance financial consumer protection through consumer education. Besides, for strengthen competent authorities, some countries, such as United States and United Kingdom, even changed the structure of financial supervision. Even though Taiwan is also influenced by the tendency of regulation modification and has amended some regulations for financial market; however, the modification is not enough. In Taiwan, there are many financial derivatives are still not regulated because of the narrow coverage of regulations and that it provides room for regulatory arbitrage. Besides, the requirements provided by soft law for reducing systemic risk for financial institutions are not fully adopted, centralizing trading has not introduced to OTC market yet, and that there is no long-term plan for consumer protection policy. Moreover, the deficiency of independence makes the competent authority of financial supervision difficult to achieve its missions. This thesis discusses the financial market regulations focusing on financial derivatives through a comparative approach and provides the author’s suggestions for the modification for financial market in Taiwan.
Subjects
global financial crisis
financial derivatives
systemic risk
ISDA Master Agreement
Dodd-Frank Act
central netting system
Basel Capital Accord
shadow bank
financial consumer protection
structure of financial supervision
Type
thesis
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