The Research Of Withdrawal Mechanism Of Financial Institutions

Market withdrawal mechanism of financial institutions is an important part of financial regulatory system as well as an important content of maintaining financial security. A sound market withdrawal mechanism of financial institutions should include the complete legal system; financial institutions early warning mechanism, deposit insurance mechanism, market-oriented withdrawal mechanism, complete organization mechanism and financial assistance mechanism etc. Presently, an effective Market withdrawal mechanism of financial institutions has still not established in China. Since the nineties of the twentieth century, China has launched the high-risk financial institutions to be disposed classifiably, financial institutions with serious problem to exit the market, to better safeguard our economic and financial security and stability. However, due to the work of our financial institutions to exit the market is still in its infancy, we are still in the lack of theoretical preparation, mature experience, available laws and regulations. Coupled with low social tolerance and social integrity, market withdraw of financial institutions is still a challenging and suffering job for us., moreover, because of interference of administration power, the market-driven measures are rarely used. Government and financial regulators played an important role, although there is a strong impetus to the market withdrawal of problem financial institutions, causes such serious problem that the market exit mechanism for financial institutions has not really established. Compared with large state-owned commercial banks, medium and small financial institutions tend to become a high risk area because of its small capital scale, ineffective internal control management, which usually leads to deficient risk-resisting ability. Therefore, this article aims to discuss how to establish financial-risk early warning system,improve legislative and legal system,explore and solve various problems occurred in market withdrawal of financial institutions, and how to establish a practical market withdrawal system that complies with our national conditions and the needs of medium and small financial institutions.In this paper, the background and significance of the topics are described, followed by research on domestic and foreign literature are reviewed. The second chapter discusses the meaning of market exit of financial institutions, mainly the definition of market exit of financial institutions, methods, and two dominant orientations are described, laying the groundwork for subsequent analysis. The third chapter is mainly summary reference, the mainly purpose is for the domestic financial institutions to provide the experience. The fourth chapter focuses on analysis of Chinese financial institutions to exit the market problems, and market withdrawal of urban credit cooperatives in a city for example, focuses on analysis of the difficulties and contradictions of the disposal of the financial institutions, and the possible hazards and effects. The fifth chapter is the ultimate goal of this article, designed a blueprint that the market-oriented reforms of the mechanism of withdrawal China’s financial institutions:a clear market exit of financial institutions, the basic principles, based on work requirements in order to build a financial risk early warning system, legal system, deposit protection and loss-sharing mechanism as the purpose, made out the basic ideas and assumptions of China’s market-oriented financial institutions, Finally, policy recommendations and areas for further research are written.