Comparative Study Of Chinese And Foreign Floating Charge And Prevention Of Commercial Bank Credit Risk

Floating charge is a special mortgage system, which developed from practice by the British Equity Court. It is a very flexible mortgage system, using mortgagor's future available possession as security asset and without any articles as collateral asset. However, the mortgagors still can use their possession to continue their business and deal with the collateral asset themselves without the permission of the mortgagee during the daily operation. Floating charge legal system not only exists in the United Kingdom, United States, and other countries using Anglo-American law system, but also exists in the civil law countries like Japan. Floating charge is wildly used in the international financing, especially in the large-scale project financing. In recent years, using possession and income of a whole project as the floating charge collateral charge is not a rare case in China. In response to the practical requirements and the request of many scholars, the floating charge system was introduced and adopted by the"Property Law of People's Republic of China"in March 16, 2007. This system is favorable for enterprises to fully utilize all of their properties as the collateral value and also simplifies configuration and operation procedures of enterprises'mortgage. However, there are certain risks for mortgagees because the mortgage collateral is constantly changing. Comparative study of the floating charge and understanding of relevant provisions is meaningful in preventing the bank credit risks, stabilizing socio-economic life, and further improving our mortgage law system.By comparatively studying British, American, and Japanese mortgage laws and relative regulations, as well as"Property Law of People's Republic of China", this article wants to further improve Chinese floating charge law system, prevent mortgagors from cheating from banks using those regulations, promote construction of banks law risk control system, and protect benefits and rights of banks as mortgagees.This article is composed of a preface and four chapters. Chapter one introduced floating charge system's commencement, development, and main properties, and analyzed and judged the pros and cons of this system. Chapter two introduced British, American, Scotch, and Japanese floating charge laws and relative regulations as well as China's new property law. It also comparatively studied differences of the floating charge between different countries on subjective setting of the floating charge, the scope of mortgage collateral assets, mortgagee's ownership to the collateral assets, complement of the mortgage right, the order of the mortgagees, and etc. Chapter three analyzed and judged the pros and cons of China's property law; pointed out the suggestion on further improving China's floating charge law system. Chapter four analyzed the influences of China's floating charge law system on banks'credit loan business and discussed the noticeable legal problems of the usage of this mortgage way in banks'credit loan business.