| In China, the bank system is the main part of the current financialsystem, which plays a great role in economic developments withproviding them continuous and large number of fund, at the same time,the bank system security is closely connected with the social stability too.When one bank goes to problem or become insolvency the result will bebadly serious, so the effective disposal to the falling bank is urgentlywanted. This study is wholly and systematically analyzing the disposalsto the Chinese falling banks. There are four chapters in the paper: The first chapter is to introduce the falling banks status quo inChina and explore why they come into being. The falling bank is referred to the commercial bank which can'tmeet its normal cash demand or is involved into the bank squeezingbecause it has already or almost lose solvency. The banks bring hugeproblems to the national or local financial system and economydevelopment, such as threatening the whole bank system security,debasing the fund allocation efficiency, embarrassing the central bank,weakening the economic development impetus and costing the fiscal fund,even the worse is that social stability would be likely destroyed. The bank is one high-risk corporation, so there are many reasons forwhy some of them became insolvent. The general reason includes: thebank's innate fragility, the defective attorney arrangement, the unstablemacro-economy, the excessive intervention by the government and theintense competition in the financial market. As for as the falling bank inChina concerned, the main reason are the heavy historical burden, theeconomic transformation, defective stock structure and low runningefficiency. All above indicate that the falling bank in marketed economyis very hard to avoid. Chapter 2, even the falling bank appeared much earlier in some othercountries and its problem was also far serious, the government andfinancial supervision authorities in these countries have explored somesuccessful disposals and experience which could be as reference to ourcountry. This chapter is mainly about the practice in some foreigncountries about disposing the falling bank. The common measures to thefalling bank could be summarized as: providing assistance, recombinationor merger, liquidation. Providing assistance for the falling bank to sustain is often the firststep adopted by the relating department, especially when the banksqueezing happens, because it can improve the bank solvency, reimbursethe depositor and debtor, insure their confidence and calm down thesqueezing. The typical country on this deposal is Japan and the typicalcase is the Continental Illinois National Bank in US which got help fromFDIC. As providing assistance is the measure of "transfusion", therecombination could be seen as recovering the falling bank"hematogenous function". It is obvious that the latter is more important.The typical practice is Korea bank system reform after the financial crisisin 1998, the recombination to the fifth Japanese bank---Resona Bank, theFDIC purchasing the problem banks in US. Liquidating the falling bank is a hard measure in the practice, whichquits the bank so to "make the market clean" automatically. Butliquidation need premise for avoiding more trouble caused by themeasure taken. One of famous case is the bankrupt of the Baring Bank inBritish. Chapter 3, the chapter is the theory analysis on how to deal with thefalling bank. From the varied practical disposals took by the aboveforeign governments and financial supervision authorities, we canabstract them to three general principles: preventing the bank systemfrom one or some falling banks, weighing the disposing cost and gain,proper intervention by government. The principle of preventing the bank system from one or some fallingbank emphasized on the security of the healthy banks and the whole bankmarket, which is the foremost because the bank crisis theory explainedhow serious it would be. It is out of question that the disposer should tryto make the dealing cost less than its gain; As... |
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