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has become the sole regulatory body which has banking, insurance and securities and futures regulatory functions. From December 1, 2001, the Financial Services Authority has begun to exercise the right of financial regulation, to take charge of the regulation of domestic banks, insurance companies, housing associations, unions, credit associations, Lloyd, pension advisers, securities brokers, investment services, professional company, derivatives traders, mortgage lender and the professional engaged in investment business (Ross Levine, 2006, Rethinking Bank Regulation (Till Angles Govern: Cambridge University Press)). Although such a regulatory model is not for the British first, but Britain is the first country in the world's financial center that chose this model of a single national regulatory body.

5. Regulatory issues of China’s financial derivative market
5.1 Effectiveness of government regulation
The first appearance in China's offshore derivative financial transactions began in the early 80s, 20th century, but because of the lack of appropriate financial regulatory support mechanisms, there have been such prevalence phenomena that underground derivatives rampant speculation, the risks are enormous. To this end, the People’s Bank in June 1995 issued a notice, prohibiting the illegal domestic financial institutions involved in offshore derivatives trading business. On the other hand, the domestic derivative financial transactions are starting to get late. First launched in 1997 the Bank of China released the long-term exchange settlement and sales, to today’s gold futures, financial derivatives, the pace of our development is still not fast enough. Derivatives combined with the development of our country’s financial situation, we find that it must speed up the development of the financial derivatives market and to manage the risk now. The market economy is the legal economy; we must first make sure that market economy requires a market-regulated, government regulation subsidiary. Government regulation of financial derivatives market, primarily through legislation or authorized by law, by the specialized agencies and by the regulation, supervision and management trading conducts of financial derivatives market. Government's most important responsibility is to the financial derivatives market regulation and create a legal basis, rules-based market conditions, create the establishment of a fair competitive market environment and a sound trading system, safeguarding the legitimate rights and interests of parties in the transaction, to ensure that transactions activities are in an orderly manner, thereby it can contribute to the development and stability of the financial derivatives market (Congleten, RD 2009).
However, how is the effectiveness of government regulation in China? From the current situation of the banking sector, despite the massive of China's banking industry, but fragile, many basic statistical data reflect this reality. Before the absence of state funding and the shareholding system reform, the adequacy ratio of the four state-owned bank’s capital was less than 8%. In mid-2007, Shenzhen Development Bank's capital adequacy ratio was only 3.88%, well below the 8% requirement; such as Pudong (SPDB), HXB, etc. the two banks’ capital adequacy ratio is both only less than 8% or in hover this level (Congleten, RD 2009). In recent years, though non-pe