Abstract: In order to effectively respond to a possible financial crisis, China needs to further strengthen its financial stability legislation. To ensure the scientific nature of the legislation, it is necessary to review the historical context of financial crisis events in modern times and explore the logical relationship between financial crisis, financial stability and the financial rule of law. Through the analysis of major financial crisis events in modern times, it can be seen that, in the construction of financial stability and rule of law, China should pay attention to the economic and social background of the financial crisis, the main factors affecting financial stability, and the important role of the rule of law in maintaining financial stability. Financial crises have deepened the understanding of the meaning of financial stability and the main factors affecting financial stability, and highlighted the importance of the rule of law for financial stability. A financial crisis can be seen as an abnormal imbalance in financial stability. The main factors affecting financial stability include high financial leverage, financial cycle, real estate industry cycle fluctuations, financial innovation and other factors. Financial stability inevitably requires an effective response at the level of the rule of law. In modern society, finance is an important core competitiveness of the country and plays an irreplaceable role in promoting economic development and maintaining social stability. Based on the need to prevent and respond to financial risks, all countries in the world generally attach importance to the construction of financial stability and rule of law. As far as China’s current situation is concerned, in order to effectively respond to the current possible financial crisis, it is urgent to establish and improve China’s financial stability and rule of law system in an all-round way in multiple links such as legislation, law enforcement, administration of justice and observance of law. Financial stability legislation is the basic link in the construction of financial stability and rule of law, and to further strengthen the construction of financial stability rule of law, China must vigorously promote the process of China’s financial stability legislation. At present, all sectors of Chinese society have reached a basic consensus on the necessity and feasibility of enacting the Financial Stability Law, and the time is basically ripe for the introduction of the law. In the process of financial stability legislation, Chinas should pay attention to systematization and coordination, adopt a comprehensive legislative model, attach importance to the connection and cooperation between relevant laws and regulations, and give full play to the synergy between different laws. At the same time, it should also base its finance stability legislation on China’s reality, accurately grasp the current major financial risks in China, properly establish the relationship of powers and responsibilities between the central and local governments in scientific and rational way, attach importance to and strengthen the exploration of local financial stability legislation, and formulate a financial stability law that truly suited to China’s national conditions. 

Key Words: financial crisis; historical mirror; financial stability legislation in China

Author: Xiao Jing, an associate research fellow at CASS Institute of Law; 

Source: 6 (2023) Journal of Shandong University (Philosophy and Social Sciences)