New bankruptcy law for China

by Richard Kilner

Story link: New bankruptcy law for China

A new act designed to govern banks that fall into bankruptcy in China is expected to become law in the near future.

The new act, named the Bankruptcy Act for Banking Institutions, is said to give more precise guidelines to financial institutions that become bankrupt compared to the current, generic, laws, according to the China Banking Regulatory Commission.

Industry insiders have expressed that view that, as China begins to make its markets more available to overseas competitors, an exit mechanism becomes more necessary and will act to bolster financial stability.

Another aspect of the financial system that could be improved in the near future is deposits.

A scheme has been proposed that would offer greater protection for depositors through a planned new law for a deposit insurance system.