The Investigation On The Legal System Of The Lender Of Last Resort

A stable financial system is an important foundation for the economic development of one country, and the salvation of financial institutions is an important manifestation of perfoeming public functions for a central bank. Lender of last resort system is a significant part of the central bank assistance system,which is a major line of defense to ensure banking safe and financial system stable, and its function protects the national economy as a whole. As a stabilizer of economy, lender of last resort system ensures the economy security. When there is a crisis in financial institutions, the central bank perfoems lender of last resort to promptly resolve risks and prevent systemic crises, and thereby stabilize depositor's confidence to ensure the stability of the financial system and avoid the risk transmitted by a single financial institution to other subjects leading to a systemic financial crisis. Lender of last resort system mitigates financial shocks so as to improve the credibility and stability of the entire financial system, and guarantee national financial security. However, the functions of lender of last resort in central bank of China is not a true "lender of last resort", but the "the first lender" and "the last will pay for people" because of the excessive administrative intervention to resolve the historical financial burden. In our country, the legal status of the system is not clear, the legal system is not complete, and the rules of behavior is not strict has led to the long-term connivance in financial institutions,which not only brings the central government finances an enormous and unnecessary burden, but also added obstacles in China's financial industry going into the international market. As the system itself has a certain degree of particularity, many countries define it the financial means, not regulate it in the legal system.In China, we even don't regulate the scope of application, application object, and the specific procedures to implement the functions. These problems do not help to play the role of stabilizing the economy for the system itself ,at the same time, they may create more problems.As a result, the country's economy will pay a huge and unnecessary costs. Therefore, systematic legal regulation is a scientific and effective way to play the "crisis loan" and "crisis manager" role of the lender of last resort and make it fit to the development of financial markets,which has a major practical significance for the construction of China's financial law and helps the overall economy develop rapidly and healthily.This paper argues that lender of last resort is not only the core functions of the central bank, but also extends out of modern central banks'monetary policy function and the financial supervisory functions, in essence, lender of last resort system "is a public good that comes from the Government who produces for the benefits of most people,which is a crisis handling mechanism compensates for market failure."The article analyzes the legal value ,legal principles and legal characteristics of the lender of last resort, through drawing on the foreign lender of last resort system of practice and analysing the legal system, the reality of the situation in our country, concluded that: It is necessary to change the role of lender of last resort dislocation, both from the legislative and legal norms on the concept. We must take into account their ambiguity and transparency to build a complete system of lender of last resort in China. The contents of this article merges characteristics of the practical operation and legal norms of the lender of last resort. As for the ideas of research, the author discusses the object from an economic transition to law, in order to provide a better and new perspective integration of the two disciplines.In this paper, the following research methods has used: 1.Historical analysis,the author expounds the function and role of lender of last resort from the course of its development; 2.Value analysis, this articles aims to China's legal construction of lender of last resort system ,in the the process of research, which necessarily involves the legal value of the system choice; 3.Empirical analysis, this article conducts an empirical analysis and comparisive induction on relevant laws and regulations at home and abroad; 4.Social analysis, this paper contacts experiences and lessons of the world financial crisis with the function performing of lender of last resort, starting from the research of social problems so as to solve the needs of society.Through the writing of this article, the author hopes that we can clearify the relationship between the nature of lender of last resort and the regulation of laws on the basis of a comprehensive and profound understanding of location, function and practical application concerning lender of last resort, and put out a program to build the legal system in our country by providing a new thought and method to make the role of the legal system more effective.