Study Of Legal Issues Related To Market Withdrawal Of Problematic Banks

Finance is the core of the modern market economy, the financial stability is directly related to the stable and healthy development of national economy and the stability of the banks and financial stability is the core key. Because of its serious Mataixiaoying negative externalities, the problem banks has gained the widespread attention of the banking and legal system in countries. It makes full use of economic analysis to illustrate the problem banks withdraw from market, which bases in exploring the legal issues from the basic theory of the banking market and views the legal systems from the Western countries. And it establishes a system and gives some ideas.This article mainly elaborates, in four sections, on market withdrawal of problematic banks. The first section outlines the problematic banks and the supervision and management of their market withdrawal, as well as discusses the problematic banks and their types, the categorization and differentiation of their market withdrawal, and the supervising and managing system for the problematic banks, etc.The second section describes the causes of the market withdrawal of the problematic banks. The problematic banks have the characteristic interdependent pathway mainly including the weakness of the bank, the conflict of authorities in the banking system, the dysfunction of financial market, and the insufficiency of financial supervision. The dysfunction of financial market and the insufficiency of financial supervision are the external variables of the problematic banks as well as the external conditions for causing the problematic banks. The weakness of the banking system and the conflict of authorities in the banking system are the internal variables of the cause of the problematic banks. The problematic banks resulted from the cross effects of both the above internal and external conditions, with the internal conditions being significantly decisiveThe third section illustrates the necessity of the market withdrawal of the problematic banks, through the seven aspects of negative external effects caused by the problematic banks. Market dysfunction is the result of the negative external effects, which refers to the damage of the efficiency of resource distribution. The existence of problematic banks cause a series of negative externalities, which accumulate and magnify as time goes by, and then result in the "Matai Effect". In other words, the problems of the problematic banks would deteriorate from the worse to the worst. The effective way to eliminate the negative externalities of the problematic banks is their early withdrawal from the financial market. The fourth part envisages our legal system of problem banks withdrawal from market. This section addresses issues the system border in the problem banks withdrawal from market and the issue of the principle of the problem banks withdrawal from market, makes full use of experience of other countries, combines it with China's status of the legislation. At last it describes the legal system and the manner of problem banks withdrawal from market in a systematic way.