China’s Banking M&A Legal System

Bank mergers and acquisitions is the inevitable result of the banking industry of free competition. With the deepening of global financial integration and liberalization, three waves of bank mergers and acquisitions have taken place worldwide. While maintaining macroeconomic rapid growth, bank mergers and acquisitions are becoming increasingly active in China, and the amount of the transactions have reached a certain size. After National People’s Congress and National Committee of the Chinese People’s Political Consultative Conference, the deposit insurance system and the interest rate market have been officially included in the reform agenda. This means that in the case of the relative success of economic reform, China will soon enter a period of financial development, and the deposit insurance system and market-oriented interest rate reform may result in waves of China’s banking industry mergers. Therefore, it is necessary to study on bank mergers and acquisitions legal system not just for the theoretical demand but for the real considerations.In this paper the basic research idea is:Point our problemsâ†'analysisâ†'solve the problems. In accordance with the above ideas, the text is divided into the following three parts:Part one, point out the problems. This section includes Chapter1and Chapter â…¡ of this article. The first chapter begins with the concept of bank mergers and acquisitions in China determined that the main body of the bank mergers and acquisitions includes not only banks, but also the following three conditions: mergers and acquisitions between banks; mergers and acquisitions between banks and non-bank financial institutions; mergers and acquisitions between banks and general corporate entities. Meanwhile, as operating currency, assets under management industry, banks’mergers and acquisitions are different from mergers and acquisitions, mainly in the following two aspects:Firstly, as deposits, loans, financial institutions, the M&A of banks is not just about the main body, it also closely related with the majority of the interests of depositors. So the main body of bank mergers and acquisitions involved more widely; secondly, as banks have a character of operating a high debt, it has a strong financial leverage and it makes bank mergers and acquisitions have unlimited tension and penetration. This ability brings the interests of the bank mergers and acquisitions, and the risk of bank mergers and acquisitions may expand rapidly at the same time. Therefore, it is extremely necessary to analyze the risk of bank mergers and acquisitions.In Chapter â…¡, the author detailed induction and introduction on the three levels of the laws, administrative regulations, departmental rules and regulations on the legal system of China’s banking mergers and acquisitions at first. Many problems can be found in our current legal system in the banking mergers and acquisitions. The existence of these problems makes the study on legal systems of China’s banking mergers and acquisitions not only have a theoretical significance, but also the practical needs of improvement of China’s banking mergers and acquisitions legal system.The second part of the content mainly analyzes the problems. This section includes Chapter â…¢ and Chapter â…£ of this article. Chapter â…¢ analyzes the necessity of improving bank mergers and acquisitions legal system from the perspective of law and economics, and historical. Chapter â…£ details the Bank of America’s M&A legal system. By comparison with the Bank of America’s mergers and acquisitions of the legal system, it makes more clearly that the problems exist in the legal system of China’s banking mergers and acquisitions.Part three is to solve the problem. This section includes Chapter â…¤ of this article. The chapter begins with the development of China’s current legislation and banking account, pointing out that in China the development of specialized banking M&A Law are outdated. It is right to regulate China’s banking M&A with the existing legal document "Law on Commercial Banks," Banking Supervision Law ","Company Law ", the" Securities Act "and" anti-monopoly law,And we should improve or develop the implementation details of those legal documents. We must clean up the administrative regulations and departmental rules and regulations on bank mergers and acquisitions at the same time, and solve the problems of our bank mergers and acquisitions legal system, such as the system is chaotic, the legislative level is not high and so on.The chapter put forward concrete proposals from three prospects of basic principles of regulation, improvement of legal system and specific recommendations of China’s banking M&A. In summary, this chapter is mainly to solve the problems and make specific recommendations to improve the legal system on China’s bank mergers and acquisitions. It also makes contributes to thinking for the future improvement of bank mergers and acquisitions legislation.