IS AUSTRALIA'S "TWIN PEAKS" SYSTEM OF FINANCIAL REGULATION A MODEL FOR CHINA? (PART 1)

As China's financial system has become more complex and integrated, calls have intensified for structural reform. In particular, many commentators have called for China to move towards the twin peaks model of financial regulation along the lines of the experience in Australia. This article explores the insights that China might glean from the experience in Australia and other twin peaks jurisdictions and suggests certain choices that China might make if it decided to adopt the twin peaks model. Although such a decision is by no means certain and other options are perhaps more likely, at least in the short term, it is of critical importance to ensure that each option is fully understood before it is either ruled in or ruled out. This article sets out to contribute to a broader understanding of the twin peaks model and Australia's experience for this purpose. This article is published in two parts. The first part examines the main models of financial regulation, particularly the twin peaks model, and analyses the various challenges and reform proposals which China's regulatory structure is facing. The second part, appearing in the next issue, discusses Australia's practices and takes inspiration from experiences in Australia and other twin peaks jurisdictions offers China.Melbourne Law School; Centre for International Finance and Regulation titled "Financial System Regulation - Is Australia's 'Twin Peaks' Approach a Model for China?"; China National Social Science Foundation [11CFX038]; Peking University Law SchoolSSCIARTICLEliguo@pku.edu.cn621-6454