Abstract
AbstractThis paper examines the cross‐border effectiveness of bank resolution measures in the context of current and soon‐to‐be revised Chinese bank insolvency legislation, that is, the Bank Resolution Regulation. The general framework is regulated in the Chinese Enterprise Bankruptcy Law. With regard to the outgoing effects of Chinese bank resolution measures, the ultimate decision is in the hands of China's counterparts. However, it is proposed that the contractual approach could be a solution to enhance legal certainty. On the other hand, the incoming effectiveness of foreign resolution measures has to be firstly recognised in China. Three major tests in terms of recognition and enforcement are international agreement, reciprocity, and public policy exception. These criteria should be interpreted against the background of emerging international regime for bank resolution and latest development in the Chinese legal community.
Highlights
The 2007/2008 financial crisis witnessed the ineffectiveness of traditional corporate insolvency regime for an orderly resolution of financial institutions
This paper examines the cross‐border effectiveness of bank resolution measures in the context of current and soon‐to‐be revised Chinese bank insolvency legislation, that is, the Bank Resolution Regulation
With regard to the outgoing effects of Chinese bank resolution measures, the ultimate decision is in the hands of China's counterparts
Summary
The 2007/2008 financial crisis witnessed the ineffectiveness of traditional corporate insolvency regime for an orderly resolution of financial institutions. Three major paradigm shifts from bank insolvency to bank resolution were identified by Haentjens and Wessels, namely, from individual to public interest, from judicial to government authorities control, and from national regulation to harmonisation and unification.. Efforts have been made to harmonise national resolution laws and to achieve an effective global resolution regime. A detailed proposal was formulated by the Financial Stability Board (FSB) in 2011 as the Key Attributes of Effective Resolution Regimes for Financial Institutions (Key Attributes, or KAs), which was later updated in 2014.4 Under the new resolution regime, shareholders and creditors are supposed to absorb the losses first instead of using taxpayers' money to bail out banks. Three types of resolution powers were summarized by the International Monetary Fund (IMF):
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
