Innovation Of Financial Regulatory System

Regardless of the Western Sandbox(hereinafter to be referred as the "Sandbox")or China's Financial Reform Pilot(hereinafter to be referred as "Pilot"),there are always gaps lying between theory and practice inside the development of financial regulatory system's reform and innovation.Besides,the mechanical application of system is radically different from the implementation of system.And the irreconcilable problems of fault tolerance and legitimacy still remains inside the development of the innovation of financial regulatory system.The Western Sandbox more emphasizes the theoretical norms of regulatory innovation and follows the conventional logical route of "institutional innovation,testing and verifying".Although it can ensure the legitimacy of the operation of the system,there is an obvious lack of tolerance in terms of the current implementation status of sandbox system in various countries.It will take a long time and continuous effort to reach sandbox system's actual implementation(giving play to sandbox's fault-tolerant market utility).On the contrary,China's pilot financial reform pays more attention to the effectiveness,and advocates the parallel promotion among the innovation of regulatory system,testing and feasibility demonstration,which is mutually prerequisite and can be switched dynamically.Also,this pilot has a good market effect but is inevitably criticized in the aspect of legitimacy.By comparing and analyzing these two models of financial regulatory system mentioned above,it is concluded that the innovation of regulatory system should attach great importance not only to the standardization and legitimacy of theory,but also to the practicability of regulatory system.Additionally,China can learn from the "sandbox" but not apply this system immediately for the huge demand for further reform in China's financial markets cannot be sustained by it for the time being.