Research On The Market Withdrawal System Of Weak Banks

It has frequently taken place in developed countries that a bank withdrawn from its market, which couldn't pay off or became insolvent because of operation failure or emergencies. And those countries have set up an appropriate mechanism separately to deal with the withdrawing behavior to minimize its cost and the negative effect on other institutions.As for China, in the past the government had been over-protecting domestic banks and there was no probability for them to exit, saying nothing of the withdrawal system. However, the government's excess protection of the system tended to cause problems of converse choice and moral risks in banks and make banks short of the restriction mechanism, which made domestic banks produce a mass of bad or risk assets and become weak banks...