A Study On Market Withdrawal Of Private Bank In China

Under the trend of breaking the monopoly of traditional domestic industry, The Decision on Major Issues Concerning Comprehensively Deepening Reforms was adopted at the close of the Third Plenary Session of the 18 th CPC Central Committee, this Decision proposed that allow qualified private capital to set up financial institutions such as small- and medium-sized banks, under enhanced supervision. Push ahead with reform of policy-based financial institutions. After that, one of the biggest barriers of state monopoly, financial sector, will enter a new ‘Private Era’. Initiated the establishment of private banks is in order to stimulate the independence and creativity of private capital, release energy of reform policy, improve the basic function of Market allocation of financial resources. From the long-term point of view, the emergence of private banks can encourage the government to raise the level of financial regulation, in favor of the efficient allocation of funds to build a sound financial system and promote stable banking sector.China Banking Regulatory Commission(CBRC) identified the first five private banks pilot program in 2014, the five private banks are as follow: Qianhai Weizhong Bank, Shanghai Huarui Bank, Zhejiang Wangshang Bank, Tianjin Jincheng Bank and Wenzhou Minshang Bank. Two more private banks are preparing. Regulators claim the pilot principle of pure civilian endowment initiate, voluntary assumption of risk, Shareholder commitment in administration, the implementation of a limited license and make living wills. Since private banks can access to financial markets to operate freely, 2 it should also be subject to the requirements of survival of the fittest competition law. Also, there will be more and more private banks in the future, in a more competitive environment, the market withdrawal of troubled banks is especially important. In contrast, Taiwan, twenty years ago had a series reform of financial freedom, such as the interest rate reform, the exchange rate formation mechanism reform, the lifting of capital controls, building systems and open direct financing of private capital into the banking sector reform. After that, a relatively perfect modern financial system was established. Market withdrawal mechanism is the core component of the banking competition mechanism, and it is the legal system that allows the bank to resume its competitiveness or withdraw from the market competition through reorganization. The establishment of the private banking market withdrawal mechanism, for the protection of China’s financial security, to safeguard the financial order of our country, to promote China’s financial development has a very significant meaning. The particularity of private banks forced China’s existing commercial bank market exit mechanism of the urgent need to improve.This article is based on the above to discuss the legal issues on market withdrawal of private banks as following parts:The first part, private banking market withdrawal system mode selection. This paper attempts to introduce the standard of private banking market withdrawal and the establishment of the market withdrawal structure, and establish the foundation for the establishment of the private banking market withdrawal mechanism from the macro level. Through the withdrawal criteria and withdrawal structure of the corresponding, for different levels of problem banks to take different institutional arrangements for the following in-depth discussion to pave the way.The second part, private banking market withdrawal support system. The support system that takes the deposit insurance system as the center runs through the whole process of the private bank’s market withdrawal. The deposit insurance system in addition in banks withdrawal from the market in a timely manner to deposit payment. In some countries in the deposit insurance agency design financial reconstruction fund, on the one hand, can in advance of problem banks for funding assistance. On the other hand can in the matter by compensating for the acquisition of bank to facilitate mergers. This article carries on reconsidering from the defects of the deposit insurance system, combined with China has implemented the deposit insurance act assessment, so as to seek whether we can draw on the feasibility of breakthroughs in the deposit insurance agency under the financial reconstruction fund.The third part is the buffer system of private banking market withdrawal. When the operating conditions of private banks in the crisis, but not to the extent of liquidation, should take a certain buffer system. The buffer system is the core of M & A. Mergers and acquisitions as a low cost, high efficiency and can keep commercial bank value, by the national regulatory authorities of the pro gaze. The import from the meaning of mergers and type, after the analysis of the merger of advantages and disadvantages, draw lessons from foreign mode-- horizontal mergers and vertical mergers combination of experience, has certain enlightenment significance to our country mergers and acquisitions at present.The forth part, private banking market withdrawal from the liquidation of the system. Liquidation of the specific performance of the system is divided into liquidation and bankruptcy. The concept of "Too big to fail" deep-rooted, commercial banks cannot be completely out of the. Private bank opened the floodgates of forced the introduction of deposit insurance system, and the introduction of deposit insurance system become perfect commercial bank insolvency legal system of it. Revoked as an administrative means to an end, bankruptcy as the judicial means to an end, this paper of were discussed. And analysis of deficiencies in the system, and discuss current acquisition system and bankruptcy system is not yet perfect, revocation of the means of existence the necessity.