Coordination Logic of Cross-border Financial Risk Prevention and Transaction Contract Allocation Within the Financial Regulation Framework

Abstract

Abstract

During the process of cross-border financial opening, the provision of risk prevention and control systems encounters a core challenge.: how to integrate regulatory rules of a public law nature with transaction contracts of a private law nature. The two sides of this paper are financial regulation and contract allocation, and their coordination logic for risk prevention and control will be examined. China has built a "dual-regulation system of macro-prudential and micro-regulation" for cross-border finance. The systems for bank foreign exchange risk transaction reporting and non-centralised clearing derivative margin management have moved risk monitoring upstream to the transaction stage. The standardised master agreements of ISDA and NAFMII incorporate regulatory requirements into private law relations via provisions such as terminating net settlement and margin arrangements, forming a micro-contract basis for risk prevention and control. The three ways that regulatory rules are translated into contract provisions are legal embedding, indirect effect and format recognition. Both are two-way interactions at the level of institutional goals, risk identification and performance guarantee: regulation defines the scope of compliance, and contracts offer a market-oriented implementation path. Strengthen the prevention and control system for cross-border financial risks, and at the same time, regulate flexibly in terms of contract risk allocation to promote effective coordination between public law regulations and the autonomy of private law.