A Study Of Banking Regulation Under The Framework Of Incomplete Law Theory

Since the Japan Export-Import Bank which is the first foreign bank established its representative offices in Beijing 1979, China has opening up of its banking industry for 20 years. With China's accession to WTO (World Trade Organization), the access restrictions for foreign banks such as operating scope of business are completely lifted. Under the new situation of China's banking industry, there are so many major problems has to be think and solved by China's legislation department of financial regulation: how to strengthen and improving the Legislative laymen of regulation; how to raising the level of regulation; how to protecting domestic banks within the framework of the WTO, while using foreign banks to develop China's socialist market economy and mitigate their unexpected effects on the financial system; how to maintaining domestic financial order and financial security.Many scholars of banking regulation have done a great deal of research, many theory can explain the regulatory phenomenon. Some of which as the Economic Regulation theory and the Public Interest theory have been played a role in many countries. However, they all have limitations. From the perspectives of the Jurisprudence of Economic Analysis, Incomplete law theory will be as a tool for the introduction of banking regulation of the study. In this paper that: the law is not perfect, this hypothesis is applicable to banking regulation, especially to the reform of China's banking industry. In this premise, how to allocate remainder of the legislative power between the legislative branch, the law enforcement agencies and regulatory authorities should effect to resolve many problems in the banking regulation.This paper is divided into four parts:There are theory in the first chapter. First of all, dual perspective of economics and law of banking regulation issues are reviewed; Then, in the third quarter, we introduce the issue of the Jurisprudence of Economic Analysis, and established a analysis framework of Incomplete law theory. Because the principle of the rule in law and some other reasons, the law is inherent incompleteness. The principle of law such as general, persistence and predictability usually requires it be designed long-term to be applicable to a large number of very different cases. It should be with the development of social economic, technology and innovation. If it is said that only when the socio-economic or technological keep static, the law should be complete. So to fully complete of laws is patently unrealistic fantasies.Because of the incompleteness of the law, if legal can not definite the harmful actions specific, the distribution of the remaining legislative become a problem. Usually, it is seen as exercise the remaining legislative power, when lawyer interpretation in the court. When the law is not perfect, the courts of law enforcement passive as the only law enforcement agencies is not enough.Since the Tribunal is passive, and only in the prosecution only after the exercise of its enforcement powers. In other words, even those who are interfering in the events should be displayed before the courts, they have no right to take action. Instead, the regulator is designed to take the initiative to law enforcement agencies. Active law enforcement, including a variety of functions relating to monitoring various activities, carry out investigations and to prevent damage, as well as to be in violation of the law, such as administrative sanctions. The court is unable to perform these functions, because of the initiative of law enforcement would violate the impartiality of the court. At the same time, as the courts and regulators in the exercise of the right of legislation and law enforcement different time, but also to monitor the existence of a necessity. After the court can only enforce the law, and regulators in both prior and subsequent to the implementation of the law, in anticipation of damage to a sufficiently high level, we can use the legislative rewrite or change the rules, in response to the observed changes in the socio-economic or technical. But first prerequisite for the legal regulation of the authority is to define clearly enough. In this prerequisite, the regulator ground for the active law enforcement officers will be prohibited from damaging acts and starting law enforcement procedures, and the latter functions will be superior than court when the law is incomplete.The Chapter II is the focus of this chapter. Incomplete law theory is used to analyze the problems of China's banking regulation. In accordance with Incomplete law theory, in a highly imperfect law, if the damage can be standardized behavior, and the act will have a large number of external, this regulation is the best. According to the theory, this chapter focus of the incomplete of China's banking regulation, and pointed out that the reality in the following questions: 1. Banking regulation is lack of "standardized" capacity. According to Incomplete low theory, effective regulation must meet two conditions: the extent of the damage and expected standardization. If the Bank regulatory agencies want have the ability of standardization it must conduct full understanding of the object of regulation. If the capacity of "standardized" inadequate, it is inevitable the regulation should be inefficiency and high cost. 2. The scoping of Bank regulatory powers is unknown: (1) There is no benign interaction between the exercise of the remaining legislative initiatives and enforcement powers. (2) Some choosing of system led to law enforcement power misconduct, and it not conducive to the realization of effective monitoring and regulation, and it also not conducive to the pursuit of the efficiency of commercial banks. (3) There is lack of market withdrawal mechanism. 3. The exercise of the banking regulation is lack of an effective mechanism of restraint.Chapter III, international comparisons. Although the monitoring of countries are different, but the changes in financial regulatory philosophy and trajectory is similar and clear, that is, the regulatory objectives has changed from the initial safety to the concept of enhance the development of the efficiency of resource allocation for the ultimate pursuit of regulation. Then enhance the competitiveness of the country's financial institutions as the starting point and final destination of the modern regulatory value orientation. These concepts, common regulatory practice and experience is a wealth of nutrients and sufficient to refer to the basis for China's banking regulatory reform.In chapter IV, from the previous analysis we concluded that the settlement of the remaining issues such as the distribution of legislative power is to improve China's banking regulatory difficulties. The recommendations are: 1. Improve the legal system and improve the financial regulation legal; 2. Take full advantage of the remaining legislative 3. Further, clarify the regulatory status and the main responsibilities. 4. Establish a sound banking supervision Index System 5. Standardize information disclosure system; 6. Further improve the regulatory regime to withdraw from the market; 7. Make the internal control system and the banking regulation system perfectly. 8. Fully attention to the light of experience of foreign legislation and reference on the basis of the combined national conditions.There are lots of articles on banking regulation and the related theoretical results are also very fruitful. Incomplete law theory is the research results of Xuchenggang who come from Economics School of London and Pishituo who come from Law School of Columbia University. It is also the latest achievements in the field of the Jurisprudence of Economic Analysis. It initially used in regulation of the securities markets as an analysis tool. The innovation of this paper is introducing the incomplete law theory on the analysis of banking regulation, and the practice proved its capabilities on interpret banking regulation. As a basis for the analysis that there is a number of new proposals. This paper is just a shallow attempt to apply this theoretical framework in banking regulatory issues, the in-depth study should be done later.