Rethinking The Legal System Of Financial Market Guarantee

In recent years,the transaction structure such as senior-subordinated structure to ensure the priority investors' interest is not uncommon in China financial market,such senior-subordinated structure products also become very popular;meanwhile,in the field of private commissioned financial management,the trustee often make a profit guarantee to the trust.However,most of China financial laws and regulations deny the effect of guarantee mechanism,and different financial regulatory bodies also hold different regulatory ideas.In addition,in the field of private trust management,because there is no law and regulations to ensure the effectiveness of the guarantee mechanism,leading to the outcome of the court's judicial decisions are different,showing a chaos.The traditional view of the guarantee mechanism holds that the design of the guarantee system violates the basic rules of the financial market,which may easily lead to the systemic risk of the financial market,while the scholars who hold the beneficial theory have analyzed the positive meaning,and this provides the paper an alternative perspective.Based on the theory of trust risk isolation,risk control and risk matching,this paper demonstrates the rationality and legitimacy of the guarantee system.Also,the paper indicates that,according to the empirical data of verdict documents,the judge will verdict the effective of guarantee behavior based on the risk.On this basis,from the perspective of risk isolation for the different subjects,this paper proposes types of recommendations: the guarantee mechanism made by the financial institutions(including the private companies and asset management companies which are under the regulatory supervision)and natural persons should be affirmed,while the guarantee mechanism made by the private investment companies with no financial supervision should be forbid.Finally,the paper calls on regulators to make a correct understanding of the guarantee mechanism.The introduction part introduces the writing background and the problem of this paper,and then introduces the domestic and foreign research situation of the topic.Chapter ? makes a comprehensive analysis of the existing laws,departmental rules and normative documents,which are effective in the legal system,and also analyzes the chaos of the judicial practice in private trust management,pointing out that there are conflicts between the laws and regulations and financial practices,and the law and regulations are relatively fragmented.On this basis,this Chapter makes an in-depth discussion and analysis of the guarantee mechanism and the contradictions of the causesChapter ? analyze and rethink the existing guarantee mechanism theory.This paper introduces the theory of the negative guarantee mechanism theory and the positive guarantee mechanism theory,and refutes the negative guarantee mechanism theory.From the perspective of law and economics and the theory of property right and transaction cost,the paper holds that guarantee mechanism plays a very important role in financial market.Chapter ? points out that the risk isolation is the core of the financial products designed.This chapter demonstrates the significance of the legal system and the function of risk isolation from the theory of trust isolation,trust relationship,the practice of financial product risk isolation system and the theory of reputation mechanism.And through empirical quantitative data analysis,demonstrates the different aspects of the private trust management,the paper further proves that different legal systems need different supervisions.Chapter ? makes a rethinking of guarantee mechanism,and points out that scholars,judges and regulators misunderstand the guarantee mechanism,and put forward the suggestion that regulators misunderstand should not be denied,but financial regulation should focus on risk disclosure,risk control and risk matching.Secondly,in view of the existing problems of the guarantee mechanism,we should put forward different legislative proposals for different types of guarantee mechanism.The conclusion part summarizes the whole Paper,and emphasizes the view of this Paper.