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Bank Claims The Protection And Corporate Governance

Posted on:2007-03-05Degree:DoctorType:Dissertation
Country:ChinaCandidate:Y X AnFull Text:PDF
GTID:1116360182491389Subject:Civil and Commercial Law
Abstract/Summary:PDF Full Text Request
In the market economy, both firms and banks are economic subjects who have independent economic interest and enjoy the right of independent operation. They benefit each other on the basis of financing relationship. Banks are credit institutions that exist to be profitable while firms obtain capital by credit. There is a typical credit relationship between them where the principle of honesty and credit maximization is observed. On one hand, with the development of firms, the financing activities of banks becomes more and more active and their business scope expand continuously, which helps to promote the firms' development. On the other hand, the firms have capital requirement and need to be financed by the banks, and they are the main interest providers of banks'loans. The development process of bank-firm relationships is a two-way selection process of financing transaction. Banks are driven by loan interest and the firms need capital. Thus acceptable market condition by both sides is formed under market restriction and game between the two parties.However, due to asymmetric information between banks and firms, there will be moral risks in their financing relationship. Borrowing enterprises will take advantage of asymmetric information for their own benefit and pass the risks to banks, causing a great deal of bad loans in banks. One of the reasons that caused bad debts for banks is the imperfect corporate governance. China's Corporate Law confirms the central status of the Board of Shareholder following the concept of Shareholder first. This legislation is related to China's shareholding structure, The flaw in this governance structure will lead to the lack of effective balance mechanism and serious problem of'internal manipulation', which would impair the firms'liability and consequently harm its creditors'right. As the biggest creditor, banks will suffer from it most. Therefore, the underlying method for protecting the bank creditor's rights to firms is to solve the problem of asymmetric information between banks and firms by means of improving corporate governance mechanism.From the practice of protecting the bank creditor'rights, available systems have a lot of disadvantage, including the civillaw, security system, corporation law, criminal law and so on. This second chapter analyzes the reason that why the bank creditors have...
Keywords/Search Tags:bank creditor, s rights, corporate governance, stakeholders, disclosure system of information
PDF Full Text Request
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