Chapter 10: Trust and Financial Regulations: A Survey and Its Implication on Shanghai FTA

Trust is the cornerstone of finance. However, in recent years, events of trust crisis in global finance sector occurred constantly. In 2000, Enron financial fraud was exposed and triggered a series of fraud and bankruptcy storm of America enterprise, resulting in the launch of Sarbanes–Oxley Act by U.S. Congress, the strictest act against corporate governance. The global financial crisis of 2007–2009, which led to a credit crunch, large scope of enterprise bankruptcy and serious unemployment, heavily struck the global financial system and economic system and seriously undermined public confidence in financial institutions and government supervision departments. “In the long run, this is more serious than any economic loss” (Zingale, 2011). In 2008, the Ponzi scheme of Bernard Madoff, the financier who had been making waves in Wall Street for decades, crashed and the moment when Madoff was arrested by American Federal Bureau of Investigation, it shocked the world…