The Legal Mechanism On The Operation Of China Financial Asset Management Company

Financial Asset Management Company (FAMC) is a financial intermediary focusing on disposing the non-performing Assets. In order to deal with four major state-owned commercial banks' non-performing Assets, China established four major FAMC drawing on the experiences of foreign countries. Based on the integration of current Chinese reality and experiences home and abroad, this thesis attempts to discuss and analyze the legal mechanism in respect to FAMC, including the establishment, the operation and the termination(or the transformation) of FAMC in China, expecting to have a comprehensive interpretation to FAMC through the angle of law.In addition to the preamble and the conclusion, the text contains four chapters:Chapter One is the overview of FAMC. It not only analyses the concept and character of the FAMC and introduces the history of FAMC, but also positions the subject of this paper.Chapter Two discusses legal mechanism on the establishment of FAMC. At first, it introduces three establishment patterns of FAMC, established by Government, by banks (as a wholly-owned subsidiary of the bank) and by other investors. Secondly, it introduces and discusses the establishment pattern of FAMC of China, as well as its economic and financial background. It analyses the legal status of FAMC of China, finally.Chapter Three discusses legal mechanisms on the operation of FAMC of China. Firstly, it analyses the common international pattern—Good or Bad Bank pattern. Secondly, it analyses legal risks of FAMC of China in disposing the bad assets through debt-equity swap, asset securitization and sale in the application of Good or Bad Bank pattern and puts forward the corresponding countermeasures.Chapter Four discusses legal mechanisms of the termination and transformation of China's FAMC. Then it proposes that the transformation goal is to become Financial Holding Companies after the analysis of patterns of the termination and transformation of China's FAMC according to China's realities. It also analyses legal and institutional barriers of transformation, and then it brings forward the legal measures and recommendations for improving the transformation.