The study of effectiveness of U.S. financial regulation based on the financial market efficiency

In recent years, the worldwide financial markets are developing with a rapid speed, while the financial security and financial efficiency are questioned. This paper classes U.S. financial regulation as two periods: efficiency priority in 1980s and focusing on both safety and efficiency after 1990. With the R/S analysis of stock return index and regress Hurst Index of those two phase, the paper tests the efficiency of market resources allocation by price signal to measure the effectiveness of U.S. financial regulation. Empirical results show that financial efficiency and regulatory effectiveness of the second period is significantly higher than those in the first period. However, financial markets efficiency before sub-prime crisis still needs to be improved and regulation effectiveness also should be strengthened.