Cross-border Bank Insolvency Legal Problems And Coping Methods

With the integrating of the global economy, more and more financial institutions set up their branches, or agencies other than their home countries. As a financial institution does it business more than one country, it can be called transnational bank. Not only to one country, but also to the world, financial institutions, especially commercial banks play a very important role not only in economy but also in society. For this reason, we must pay great attention to their operation. However, this essay is not to discuss how to prevent the failure of transnational banks, but to discuss how to deal with the issues and problems arising in legal aspects when a transnational bank goes to failure. In recent years, heightened interest has been given in the subject of bankruptcy, however seldom achievements had been found in the subject of transnational bank insolvency in our country. This essay is based on the two following research results: the research results concerning general bankruptcy and transnational bankruptcy in our home country, and achievements related to the subject of transnational bank insolvency abroad.The main ideas and contents of this essay including:1. briefly discuss the relevant concepts such as insolvency, transnational bank insolvency and the social function of the law in bankruptcy. In my opinion, some concepts which may be well accepted by common people should be paid a little attention to. In the former parts of this essay, comparative analysis has been mainly used.2. detailed discussion concerning the legal aspects of the transnational bank insolvency, which is the major part of this essay, has been given in the second part. It includes the effects that regulatory action and insolvency proceedings taking place in the home country may have in foreign jurisdictions, the treatment of foreign creditors in local proceedings, the means to reduce the systemic impact of a bank failure in cross-border payment and securities settlement system, and comments given on the European Settlement Finality Directive.3. part 3 mainly discuss the solution of the problems arising in the transnational bank insolvency. One way is to adopt possible supranational approaches. It addresses the need for a global solution and exams the proposed European Directive on the Reorganization and Winding-Up of Credit Institutions.4. part 4 based on the current situation of China's commercial banks and their insolvencies, to deal with such problems effectively, some personal opinions has been offered .