In addition to regulating the legal relationship, the legal framework for the financial sector has many other functions, including punishment, encouragement, inhibition and guidance. In economic terms, it could be translated into predictable interest or loss. A large number of rules and regulations for the financial sector have been formulated since 1979, when China adopted the reform and opening-up policy.
Such rules as the Law of the People’s Republic of China on the People’ s Bank of China, the Commercial Banking Law of the People’s Republic of Chin, the Law of the People’s Republic of China on Banking Regulation and Supervision, the Securities Law of the People’s Republic of China, and the Insurance Law of the People’s Republic of China which regulate financial supervision, financial institutions and their behaviors, have formed the fundamental legal framework for the financial sector.