On Insolvency Law Of Financial Institutions

There has not been any problem on the insolvency of financial institutions in China, for the absence of a competitive environment. The country's implicit guarantee makes it difficult for the healthy development of the financial industry. As the financial industry, market-oriented financial institutions as the main body of market activities, but also must follow the laws of the market under the premise of survival of the fittest. As financial institutions are unique, the lack of legal regulation of the market exit will not only affect the immediate interests of investors and depositors, but also affect the country's economic development and social stability. Therefore, setting a reasonable system of financial institutions in insolvency law, so that troubled financial institutions in an orderly exit from financial markets is to maintain financial operation, safeguard the financial and orderly competition needs, but also to improve the efficiency of financial markets and the allocation of resources, enhance risk awareness, the establishment of the health needs of the market mechanism. The paper is divided into four parts:The first part is an overview on the insolvency of financial institutions issues. Establishing a sound legal system of China's financial institutions is imperative to insolvency. On June 1, 2007 formally introduced the new "PRC Enterprise Bankruptcy Law," the first time, specifically on the financial institution fails to make explicit provisions. This provision of bankruptcy for financial institutions to provide some legal support, but the provision is also a declaration and conceptual requirements, operability is not strong, but also administrative regulations further supplemented and improved. With China's accession to WTO, the end of the financial industry protection period, China's banking sector will be further integration into the globalization, openness will continue to deepen. Chinese financial institutions must face the fact that bankruptcy may occur, take precautions to speed up the development of additional laws and regulations. Bankruptcy of financial institutions at stake, in the formulation of relevant laws and regulations, we should carry out adequate research preparation. First, we must correctly understand the special nature of bankruptcy of financial institutions, financial institutions and businesses in general the biggest difference lies in the nature of business is unique. Financial institution's business mainly includes currencies, securities, debt, futures, insurance and other financial products, its greatest feature is its capital, the small proportion of total assets, is typical of highly indebted enterprises. In addition, the assets of financial institutions have a dual character. The first part of the same general business, that is the company's own capital, both shareholders, investors, also includes the proceeds obtained by the operation. Another part with the other enterprises have a significantly different, in this part of the asset is mainly hosted by a financial institution client assets, including deposits, investments and insurance premiums and so on. Customers a wide range of financial institutions, covering all areas of society as a whole individual, which directly affect the operating conditions of society as a whole. Moreover, financial institutions, but also shouldering the entire country's economic activities, regulation and conduction function, once its crisis, it is possible transmission and spread to the entire economic chain. Moreover, with the development of society, around the world the concept of bankruptcy of financial institutions is also growing, bankruptcy law, the legislative-based protection from creditors, has developed into today's balance and social interests, bankruptcy law, protection of creditors by value repayment evolved to the chase to the social stability and development.The second part is the legal system of China's financial institutions in insolvency status and the problems on that. Specialized financial institutions in China there is no bankruptcy law, the relevant provisions scattered in different departments and different levels of effectiveness of existing laws and regulations, these provisions of the insolvency of financial institutions of China's legal system building laid the institutional foundation, but its problems are still very serious. First of all, China's current legal system, financial institutions, the lack of systemic insolvency, various legal provisions conflicts, the confusion caused by the standard and legislative thinking is not uniform. Second, the lack of systematic legislation will inevitably lead to confusion in the law, different subjects make different rank in the provision of legal documents inevitable conflicts that will be detrimental to law enforcement, but also undermine the authority of the law. Third, China's current legal system, financial institutions, the lack of operability of bankruptcy, from the existing legal provisions of view, the insolvency of financial institutions in bankruptcy standards, the main bankruptcy, the manager system, bankruptcy claims on issues such as lack of achievement is strictly prohibited and detailed provisions of , leading to a serious lack of existing legal provisions operability. Moreover, a considerable portion of the law out of line with China's national conditions, resulting in practice difficult to be fulfilled.The third part is outside the legal system and insolvency of financial institutions on the Enlightenment. By the United States, Britain, Germany and Japan, financial institutions, legal system, the study of bankruptcy, the author of China's financial institutions come to the insolvency legislation revelation is as follows: First, we should insist on the insolvency of financial institutions insist on the principle of localization of the legal system, drawing on other National law experience, must be based on their actual situation, to make scientific judgments and reasonable choice. Second, the various market exit mechanism for each performs its responsibilities, a sound market exit mechanism must include the dissolution, closure, mergers and acquisitions and bankruptcy in many ways, bankruptcy is an important component of its parts, these methods carry out their duties, are indispensable. Again, state intervention could be considered appropriate in advance, which would help reduce financial risk, and promptly cut off the chain of debt expansion. Moreover, we should expand the scope of bankruptcy applicants, for its part, the right to financial institutions, bankruptcy petition, it shall include the debtor, creditors and financial regulatory authorities, but before the debtor filed for bankruptcy should receive financial regulatory authorities. In addition, we should establish a strict system of selection and specialization of the receiver and liquidator team.The fourth part is on the establishment of the legal system of china's law on insolvency of financial institutions. We should learn from the following aspects to construct China's financial institutions in insolvency law system: First, the legislative principle, should insist on bankruptcy prevention, stability and cost minimization principles, step by step in promoting our national financial institutions, bankruptcy legislation; Secondly, in the legislative model , we should select sub-industry legislation and plans, financial institutions, the progressive realization of a uniform insolvency legislation, using a compromise-based model, can be either a judicial power, authority and impartiality of the strengths and expertise of financial regulators to design a more rational financial institutions, bankruptcy the legal system mode; again, in terms of system design should be based on China's national conditions, comprehensive, objective and reasonable definition of the scope of China's financial institutions, on this basis, appropriate use of supervision of the bankruptcy of the standard doctrine, a clear application for bankruptcy of financial institutions of the main terms and conditions to build a scientific mechanism for selecting the insolvency administrator, insolvency administrator to cultivate a professional team, according to different financial institutions to solve the special circumstances of the declaration of bonds to strengthen the personal bond of financial bankruptcy protection, rational arrangements for financial institutions in insolvency when the liquidation order; Finally, the establishment of a sound and effective deposit insurance premiums and other supporting security system.