Study Of Non-performing Financial Assets, The Disposal Of Legal Mechanisms

On the basis of existing research results of law and economics concerning financial non-performing loans (NPLs), the author by compared existed legislation or practice of the world expounded systematically such matters as the basic concepts, forming factors and the leading methods of disposition so as to analyze China's NPLs' dispositional mechanism, major methods, process and some problems within thereof, and finally point out the causes for legal problems in legal dispositional mechanism and operational suggestion for AMC's future. This paper consists of five parts as follows:First, introduction to NPLs, based on the definition of NPLs at the beginning, the author briefed China's dispositional situation of NPLs, definned the research sphere within the four major assets management corporations (AMCs) and then analyzes the causes of China's NPLs from the angle of general meaning and law, descript the special features of China's NPLs that debtors, mainly State Owned Enterprises (SOEs), infringed the legitimate rights of banks which lead to externalities, and further weakened inspections or supervisions over both banks and SOEs. Furthermore, the complicated agency relations encroach on the power balance within banks to make some Chinese touches of NPLs.Secondly, the author briefed the currently situation about Chinese NPLs. The existed dispositional methods to handle NPLs of China include refilling capitals into the State Owned Banks (the Big Four), establishing AMC, debts-equity swaps, and NPLs' securitization. As to the legal climate, he focused on several restrictions or adverse effects made by current legal mechanisms, in which bankruptcy, business reorganization and litigate procedures are most important. And then, he introduced the progress of NPLs' disposition of Big Four and questioned the so called foreign capital involvement introduction.Thirdly, he compared and analyzed the international experiences of NPLs' disposition. Originated from the United States, the NPLs dispositional system established by the federal legislation which consisted of the operational...