On Standard Of Bankruptcy Of Commercial Bank

In recent years, the financial industries are developing rapidly in our country. Monetary fund and emerging powers of Internet finance such as "Yu’e Bao", a money-market fund promoted by Alipay, were arising. What’s more, the access of private banks has been put on the agenda, and the banking industries are facing the unprecedented pressure of competence. In order to face the banking failure caused by the marketing competence, it is of vital importance to establish the bankruptcy legal system suitable for the banks. The standard for the bank bankruptcy is one of the important steps of the construction of bank bankruptcy legal system.Under the current system, bank bankruptcy in our country is still using the standard of common bankruptcy, namely the standard of cash flow and the standard of balance sheet, while the bank bankruptcies in most countries of the world are using the regulatory criteria. Although the academic circles in our country has reached the basic consensus that the regulatory criteria should be adopted in the bank bankruptcy, there is still a lack of deep discussion about the regulatory criteria in our academic circles. This article aims at analyzing the criteria of common bankruptcy and the special characteristics of bank deeply, arguing why the criteria of common bankruptcy cannot be adopted in banks, and explaining the reasons of the adoption of regulatory criteria in banks. Moreover, the advice for legislation will be given out for the construction fitting the criteria of the bank bankruptcy in China by analyzing and comparing the regulatory criteria systems in the United States, the United Kingdom and Canada.This article consists of three parts:the introduction, the body and the conclusion.The introduction gives a brief instruction about the backgrounds and meanings of the topic selection, the research status, and research ideas and methods. And also, the core of the problems in the research is brought out, which is "why the criteria of common bankruptcy cannot be adopted in banks" and "what criteria should be adopted in the bank bankruptcy"The first chapter combs the concept of criteria of common bankruptcy, and analyzes both advantages and disadvantages of "the criteria of cash flow" and "the criteria of the balance sheet". After that, it analyzes the current bank bankruptcy legal system in our country, and provides matting for the inability of the adoption of the criteria of common bankruptcy in the bank bankruptcy and the construction of criteria of the bank bankruptcy in our country.The second chapter aims at discuss the influence of the special characteristics of banks on the criteria of bankruptcy, and the characteristics and classifications of the criteria adopted in the specialized bank bankruptcy. Firstly, the author put forwards that, according to the special characteristics of the financial status of the bank bankruptcy, the criteria of common bankruptcy did not take the public welfare involving in the bank bankruptcy into consideration. Secondly, the author argues that the regulatory criteria with fitness, prospective, operability are more suitable for banks by analyzing the differences between regulatory criteria and criteria of common bankruptcy. Lastly, the author makes the theoretical classifications of regulatory criteria. According to the different functions, the regulatory criteria can be divided into "the criteria of starting the disposal measures"(initiate criteria) and "the criteria of identifying the risks of bankruptcy"(identifying criteria). The initiate criteria can be divided into "rigid criteria" and "non-rigid criteria", according to whether the supervisor has his own discretion about the starting measures. The identifying criteria can be divided into "flexible criteria" and "inflexible criteria", according to whether using the fixed indicators to identify the bank bankruptcy.Chapter Three further interprets laws, regulations and regulatory policies in the United States, the United Kingdom and Canada in detail according to the basic logic of the initiate criteria and identifying criteria. Through the research and analysis, the author points out that, first of all, under the administration-dominated bankruptcy system, USA adopts both "capital level" and "the principle of safety and stability" as criteria for bankruptcy. Secondly, under the judiciary-dominated bankruptcy system, UK applies various criteria to different bankruptcy application entities. While supervisors adopt extremely rigid initiate criteria, Secretary of State adopts relatively loose criteria for bankruptcy. Meanwhile, UK introduces "threshold conditions", which serve as access conditions for banks, to measure the safety and stability of banks when determining banks’ operation failure. Thirdly, the bankruptcy of Canadian banks is subject to diversified initiate criteria. Supervisors are entitled to consider liquidation as long as they believe banks fail to meet specific regulatory requirements in terms of capital, profits, assets and certain aspects of compliance. Fourthly, when it comes to identifying criteria of the risk of bank bankruptcy, all three countries mainly adopt flexible criteria, which would evaluate the ability of banks to burden risks in order to fully adapt to the characteristics of single bank and identify and judge the bankruptcy of banks efficiently. Besides flexible criteria, under the administration-dominated bankruptcy system, USA also adopts rigid bank bankruptcy identifying criteria.Chapter Four studies the background of the construction of bank bankruptcy criteria in China and analyzes its influences on the design of bank bankruptcy criteria. Ultimately, given the reality in China and the legislative experience in other countries, the author proposes legislation suggestion that China should establish regulatory criteria, including composite initiate criteria and flexible identifying criteria. The author also provides solutions to eliminate the contradictions between regulatory criteria and current bankruptcy law.The conclusion summarizes the cores of the article and emphasizes the necessity of establishing special bankruptcy criteria catering to banks in China.