Umbrella"Double Peak" Supervision Mode Combining Institutional Supervision and Functional Supervision

After the subprime mortgage crisis, the U.S. Government started a series of financial reforms, because many stakeholders were involved, and the reform process was full of twists and turns. Following the"Blueprint for a Modernized Financial Regulatory Structure" published by the Bush administration in 2008, the Obama administration put forward"Financial Regulatory Reform: New Foundation" in 2009

Financial R egulator y R eform: A New Foundation), began to emphasize centralized supervision and expand the scope of supervision. The most representative Dodd-Frank Wall Street Reform and Consumer Protection Act is considered to be the most severe financial reform bill in the United States since the Great Depression. It advocates strengthening financial supervision in an all-round way from the aspects of setting up government regulatory agencies, preventing systemic risks, subdividing financial industries and their products, consumer protection, crisis management, etc. The establishment of an inter-departmental Financial Stability Supervision Committee led by the Ministry of Finance to manage systemic risks to prevent possible moral risks and unfair transactions in financial institutions; The Consumer Financial Protection Bureau was set up to strengthen the protection of consumers and investors. At the same time, the Federal Reserve was given more regulatory functions, including macro-prudential supervision, aiming at prevention and control's financial systemic risks and maintaining financial market stability.

The Financial Services Supervision Committee, specially established in 2010, monitors systemic risks by means of"double insurance" and promotes inter-departmental cooperation. The umbrella-shaped financial supervision framework in the United States is actually a perfection based on Australia's"double peaks". It is a combination of institutional supervision and functional supervision, which is conducive to enhancing the financial competitiveness of the United States. The mixed operation mode has also been improved and corrected. However, because of the huge cost of over-supervision, the profitability of large financial institutions has been damaged. For example, the restrictions on the proprietary business of large financial institutions under the Volcker Rule make it more difficult for financial institutions to make profits under the extremely low interest rate of the Federal Reserve; On the other hand, small and medium-sized financial institutions are struggling in the harsh regulatory environment. Not only are people facing higher financial service costs, but the real economy is also facing the problem of difficult financing, which leads to capital loss overseas and limits industry innovation.

Eight years later, Donald Trump took office as US president and pushed for the signing of the Act on Promoting Economic Growth, Deregulating Regulatory Requirements and Protecting Consumer Rights and Interests, once again brewing regulatory reforms aimed at relaxing regulatory restrictions. The new law cancels the Volcker Rule, which restricts banks from speculative transactions, relaxes the financial supervision of community banks, credit cooperatives and regional banks, and stimulates the vitality of small and medium-sized banks by raising the threshold of systemically important financial institutions and exempting some banks from stress tests.