Study On The Order Of Depositors’ Compensation During Commercial Banks’ Insolvency

As we all know,commercial banks have an important financial position in any countries.With the spread of the global epidemic in 2020,more and more scholars began to pay attention to the commercial banks’ insolvency and the protection of depositors.For the protection of depositors’ interests,the practice in China has always been that the nation finance instead of bank credit provides implicit guarantee for the legal rights and interests of the depositors.However,with the increasingly fierce competition in the financial market,this kind of implicit protection has been unable to meet the needs of China’s economic development.Commercial banks are enterprises specialized in financial business,and their property composition is inevitably different from that of ordinary enterprises.In addition,the particularity of the creditors of commercial banks and the importance of their status in the national economy lead to the special order of the liquidation of property in their insolvency.The bankruptcy law of commercial banks in modern sense originated in the 1930 s,some countries,,such as the United States have embarked on the road of separate legislation for the insolvency of commercial banks and ordinary enterprises,the characteristic of this mode is that the bankruptcy commercial banks applies special bankruptcy procedure and rules,and gives priority to depositors.On the contrary,in most European countries represented by the United Kingdom,the bankruptcy of their commercial banks mainly applies the traditional bankruptcy law of commercial enterprises.After the 2008 financial crisis,the two legislative modes show the tendency of mutual integration,the reason is that the aid of government to the banks in crisis objectively affects the bankruptcy procedures of commercial banks and the order and proportion of the settlement of all kinds of debts of banks,however,the confirmation of the debt settlement order of the bankrupt bank has gone beyond the traditional value concept of fairness and justice,and is more related to the stability and prosperity of the whole social economy.Compared with the developed countries,the number of commercial banks in China is less and market concentration is higher.In the process of financial system reform,there have been cases of banking failure,but there have been no bank failures in real sense.In China,the measures to deal with the commercial banks’ insolvency are mainly administrative liquidation and financial rescue.Correspondingly,the legislation of commercial banks’ insolvency is not developed.As for the problem of depositor protection,although it has been discussed in the academic circle,it mainly focuses on the construction of deposit insurance system,and there is not involve much in the order of the depositors’ compensation.Only the Law of Commercial Banks stipulates that the commercial banks should give priority to the repayment of the depositors when they go bankrupt,and the Regulation of Deposit Insurance makes general provisions on the repayment method and the amount of the repayment.In this article,the author will discuss the legal system of commercial banks’ insolvency and the problem of the depositor’s compensation order.Based on the analysis of domestic and international legislation as well as practice,the author will make a systematic and comprehensive study on the order of depositors’ compensation.Meanwhile,the author will also analyze the current situation and difficulties of depositors’ compensation in China,in order to put forward specific suggestions on how to improve the order of depositors’ compensation under the current market economy conditions.