A Study On The Law System Of Chinese Commercial Banks' Market Withdrawal

Commercial banks can not escape from the possibility of market withdrawal even under the most effective banking regulatory system. Due to their own problems such as low Capital Adequacy Ratio, high ratio of Nonperforming Loans and weak Corporate Governance, Chinese commercial banks may exit from the market at any time with the opening up and the intensification of market competition. Generally speaking, market economy operates under the rule of law and the order of market economy will get confusion without it. Owing to the imperfection of law system, Chinese former commercial banks withdrew from market blindly and left debt problem and social percussions, which do great harm to financial system and national economy. However, under such circumstance commercial banks may exit from market anytime, we have to admit that the law system in this regard is still defective. The imperfection, in some degree, has interfered with the development of the market economy and Chinese commercial banking. In order to ensure the development of financial system and national economy, the law system of Chinese commercial banks' market withdrawal must be perfected according to specific conditions of our country and international experience.Commercial banks' market withdrawals can be categorized into such two items as voluntary market withdrawal and compelling market withdrawal. The present study attempts to analyze current situation of the law system of these two types of Chinese commercial banks' market withdrawals. The paper consists of three chapters. Chapter One will provide theoretical background. In this chapter, the definition, types and the key problems of market withdrawal of commercial banks will be illustrated. The possibility of market withdrawal will also be pointed out on the basis of specific conditions of our country. Chapter Two and Chapter Three are the main part of this paper, which gives detailed examination of these two types. In addition, Chapter Two and Chapter Three perform the worldwide study from theory to practice and go deep into the investigation of Chinese commercial banks' market withdrawal according to the law-making and practice of American commercial banks in this regard. A set of practical proposals towards the problems in the law system of Chinese commercial banks' market withdrawal will be put forward based on the comprehensive contrast between Chinese commercial banks and American commercial banks.