The Study On Interest Protection Of Financial Groups’ Creditors

The traditional divided operation system of financial market has been facing challenges because of the birth of financial group. Worldwide, there is still a lack of effective supervisory measures for financial groups at present. This situation and the special nature of financial groups make it difficult to effectively control the risks of financial groups. Thus, all the stakeholders of financial groups, especially the interest of creditors will be seriously affected by great potential threats. In view of this, some countries with developed financial markets, such as America, Britain, Germany and Japan, have been carrying on many meaningful explorations on the legal rules which aim to protect the interest of the creditors of financial groups. The Enhanced Obligations, the system of disregard of corporate personality and the principle of Deep Rock, to some extent, can effectively protect the interest of the creditors of financial groups. Both the Enhanced Obligations and the system of disregard of corporate personality are the breakthroughs to the system of limited liability of shareholders, but they have many differences on specific applications which require strict conditions. This is because the system of limited liability and independent legal personality are the cornerstones of modern corporate system. Besides, they have greatly aroused the enthusiasm of shareholders to investment and have moved the rapid developments of society and economy. However, any system is not impeccable. Under certain circumstances, the application of limited liability would clearly lead to some injustice in individual case. Consequently, it will be quite necessary to introduce the Enhanced Obligations and the system of disregard of corporate personality which can remedy the unbalanced interest relations between creditors and shareholders. The principle of Deep Rock only applies to deal with the discharge order of the creditors’ rights of bankrupt affiliated corporations and has strict rules on specific applications. Overall, the applications of the three systems need to follow the principle of prudence, which means blindly and arbitrarily extended applications are not permitted. At present, financial groups have grown into a dominant force in China’s financial market. However, China has no the specialized law and regulations named financial group. Only in the existing laws and regulations related to finance, are there some articles that can protect the interest of the creditors of financial groups. In this situation, in order to effectively protect the interests of the creditors of financial groups, introducing the Enhanced Obligations becomes a must for China. In addition, there should be some specific rules on the applications of the system of disregard of corporate personality. Besides, making the principle of Deep Rock take effect in related law is very required. To summarize, the grouping development trend of China’s financial industry is appealing for the birth and perfection of the matching law and regulations.