Research On The Orientation Of The Role Of Supervisory And Regulatory Institutes In The Legal System Of Bank Bankruptcy

Banks are the financial institutions which have the longest history, cover the broadest business scope and exert the most far-reaching effects on the social-economic life in modern times. Banks are also the main bodies of the financial system of a nation and play an imperatively important role in national economy. Banks provide such basic public financial services as credit, deposits and settlement, which are an integral part of national economy and people's lives. However, the high debt ration of banks results in the vulnerability of banking industry and the contagion of bank crisis. The bankruptcy of a bank can lead to a bank run and cause the"Domino Effects"due to the systemic risks. Therefore, great efforts have been made to improve the legal system of bank bankruptcy and empower the supervisory and regulatory bodies of the banking industry with the legal authority in the process of bank bankruptcy.At present, the bank bankruptcy of China is regulated by some independent and scattered laws, administrative laws and judiciary explanations, few of which clearly prescribes the role of supervisory and regulatory bodies in the bank bankruptcy process. These laws and regulations are far from an organic system, have no specific object and are hard to be implemented, which impairs the authority of the supervisory and regulatory bodies. The newly-enacted Business Bankruptcy Law gives a better prescription of business bankruptcy, but it only lists a number of principles with regard to the bankruptcy of financial institutions and authorizes the State Council to make the relevant implementation regulations. Therefore, it seems to be urgent to make the specific laws and regulation in terms of bank bankruptcy and give a rational prescription of the role of supervisory and regulatory authorities in the entire process of bank bankruptcy including bankruptcy prevention, restructuring and liquidation.Based on the basic functions of the supervisory and regulatory institutes of the banking industry, the paper analyzes such topics as the different roles of banking supervisory and regulatory institutes in the bankruptcy process, the prudential measures that should be taken in bankruptcy prevention, the measures aimed at salvage the bankrupt banks in the restructuring process, the orientation of the role of supervisory and regulatory bodies in liquidation process as well as the restrictions of the supervisory and regulatory rights, etc. This paper draws on the experiences of the legal systems of bank bankruptcy of other countries, makes analysis of the bank bankruptcy legislation and practices and put forward some legislative suggestions.This paper consists of six chapters. The first chapter analyzes the different roles of the supervisory and regulatory bodies, courts and deposit insurance companies in the process of bank bankruptcy, the choice of bodies in charge of bank bankruptcy and the conflict and equilibrium of the rights. The second chapter discusses the prudential measures taken by the supervisory and regulatory bodies in bankruptcy prevention. These measure are aimed at banks, senior managers and shareholders. The third chapter makes analysis of the role of the supervisory and regulatory bodies in bankruptcy restructuring which involves shareholders, creditors and other banks. The fourth chapter discusses the liquidation process, including the application of bankruptcy, the approval, the choice and supervision of the institute in charge of the bankruptcy. The fifth chapter emphasizes the restrictions of the rights of the supervisory and regulatory institutes, the establishment of the censorship mechanism and the legal duties of the supervisory and regulatory bodies. The sixth chapter makes suggestions as to the orientation of the role of the supervisory and regulatory bodies in bank bankruptcy on the basis of the status quo of the legal system of our country.