Font Size: a A A

Financial Crisis, Bank Bailouts Legal System For The Study

Posted on:2012-04-02Degree:MasterType:Thesis
Country:ChinaCandidate:Q L GuoFull Text:PDF
GTID:2206330335997619Subject:Law
Abstract/Summary:PDF Full Text Request
A broad consensus that the concerns for the stability of the banking system and guard against systemic risk is real, and given to the need for prudential supervision. With the further integration of world financial markets, these problems become more apparent. The US subprime mortgage crisis starting in August 2007 triggered off the global financial crisis. From Iceland, Dubai to Greece, "national bankruptcy" from the Myth to Reality. November 2010 the Irish financial crisis will likely spread to other euro zone countries of high deficits, which pose a systemic risk. This undoubtedly shows signs an internal interconnected global financial markets and the complexity of highly contagious.As the speedy process of internationalization and marketization of China's financial market, the competition in financial industry speeds up and the global financial crises continually emerge, the factors affecting the stability and security of China's financial industry become more and more, so we are confronted with tremendous pressure. The financial industry is the core of modern economy and the banking industry is the core of the financial industry, banking crisis not only threatens the survival of the banks themselves, but also will affect the financial security, economic development and social stability. After the bubble economy and Asian financial crises, the subprime crisis provided China an excellent historical opportunity to narrow the gap between itself and leading countries in financial competitiveness, we should seize this opportunity to accelerate development. In the process, how to build a sophisticated legal aid system for banking industry to improve crisis response capacity and efficiency, ensure financial security, is an important problem we must pay attention to. According to the foreign legislation, there are three main legal aid systems for the banks crises, i.e., lender of last resort system, deposit insurance system and banking crisis taking-over legal system. China's current legislation on the legal aid systems of the banking crisis has also made provisions, but given that legal mechanisms for crisis response operation practice, the legal aid systems of the banking crisis are still inadequate, the flaws in the existing system highlighted are the absence of system and imperfections.In this regard, we urgently need to reform and improve the central bank's lender of last resort system and the taking-over legal system for banking crisis, as quickly as possible establish explicit deposit insurance legal system. In this paper, depending on the status and problems in China, in the light of the legal systems which national and regional organizations used to guard against financial risks, dealing with the financial crises, the rescue of large financial institutions (given that in China, lack of financial innovation, the market status should be further opening up and improving, large inancial institutions discussed here are mainly banks), from a legal perspective, I propose the establishment recommendations of the legal mechanism of financial crisis management.First, this paper systematically discussed the content and framework of the relatively sophisticated legal aid systems for banking crisis in the United States, European Union and other regional financial markets. Second, associating with the huge impact that the US subprime mortgage crisis had made on the global economy, the paper review the actual results that applying the country-specific law in each area produced. Facing the new situation and new risks, how the coordination, modification and innovation on the basis of the existing law would been done in those countries, and how these legal systems perform in rapid stabilization of the role of domestic financial markets, such as emergency legislation, lender of last resort system, deposit insurance system, market exit mechanism. We also note that the legal systems dealing with these crises play a bank rescue function, in the mean time, but also have been restricted by some reasons, resulting in impairment of their desired effects, and analyze the reasons to find an effective solution. Finally, after the financial crisis, although China's financial sector has not been seriously impacted, the reason is not that the financial system in China is safe, and has adequate and effective supervision, but the relatively low degree of financial globalization, financial innovation ability, and not heavily involved in subprime securities-related business. The adjustment of the financial regulatory system often point to the historical characteristics of a crisis. After the crisis, in the face of the current status of financial markets and regulatory loopholes, learning the experiences from others and taking preventive measures to improve our regulatory framework and system, enhancing our own ability to resist the banking crisis, are more sensible choices. Based on the comparative study about the foreign bank law on dealing with the crises, the theory related to establishment of such system in our nation should been put forward. I hope that this paper would contribute to the formation of the relevant legislation of banking industry.
Keywords/Search Tags:Financial Crisis, Banking Rescue Legal System, Problematic Financial, Institutions, Financial Supervision
PDF Full Text Request
Related items