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Study On The Phenomenon Of Usury In Private Lending And Its Regulation

Posted on:2013-09-28Degree:MasterType:Thesis
Country:ChinaCandidate:Y H ChiFull Text:PDF
GTID:2246330395991030Subject:Law
Abstract/Summary:PDF Full Text Request
In the long history of social development, usury has been a sensitive topic in whether it’s beneficial or harmful, whether the conviction is necessary, as well as how to regulate it. Many scholars put forward different opinions. Especially when the legal system in China continues to improve, private lending legislation mustn’t remain to be absent. With the constant expansion of private lending, the number of people involved in usury has been increasing rapidly, which is of great importance to social harmony and stability. Last year the private lending crisis has emerged in many places, and the society began to pay close attention to "the legitimization of private lending ", which shows legislation is urgently needed. The building of the legal system should be synchronized with the reform of the financial system.This thesis starts with the current haphazard development of the private lending. Using the theory of jurisprudence, civil and economic law, this paper mainly divides into three parts to discuss the understanding of the phenomenon of usury and the problems in legal regulatory process.The first part puts forward the questions, given the private lending crisis in Wenzhou and Erdos, analyses the problem of extensiveness and disorder characteristics in the current informal finance, emphasizes that at this stage private lending related legislative documents is far from perfect, especially lacking of an effective and high-power law and regulation; also there are some loopholes and problems in the judicial practice of usury behavior processing. The lack of legislative will eventually be converted to legal risks in the conduct of financial transactions, so as to further encourage higher private financial interest rates.The second part is based on legal analysis. On one hand, because of the principle of judicial autonomy, equality and voluntary of participators is required in the modern financial market, in order to come to an agreement. Even if the lending interest rate stipulated in the loan contract reaches more than the prescribed standard interest rate, this relationship should not be recognized as a criminal behavior; on the other hand, the combination of public and private law theory suggests that there is a limit in the supervision of the civil usury. It is necessary not only to recognize the important function that usury is taking in the economic development, but also to firmly crack down on the criminal behavior caused by usury.The third section presents the suggestions. We should improve the private lending legislation, giving the usury enough space to develop itself, and an appropriate increase in the maximum rate standards is needed. With the process of the marketization of interest rates pricing autonomy will eventually be given back to the main partners in the market, in order to change the current monopoly of the financial markets and to reduce the level of interest rates of usury with free competition. At the same time we should strengthen the supervision of the private lending market to curb other violent criminal acts going along with usury, and regulate the private financial market for the purpose of truly realizing the legitimization of private lending.
Keywords/Search Tags:folk loan, usury, autonomy for contracts, government supervision
PDF Full Text Request
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