Vol 18 (2021) - Issue 5

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Bank Resolution in China: The Case of Baoshang Bank

Synopsis
In this article the latest and the only bank resolution case in the past two decades in China is discussed, the resolution of the Baoshang Bank. Against the general background of the global financial crisis (GFC) in 2007/2008, and the recent economic recession due to the COVID-19 pandemic, an orderly resolution regime becomes extremely important for a stable financial environment. During my study of the process of resolution of Baoshang I found that, despite the lack of a comprehensive bank resolution law in China, the authorities have certain resolution powers, in particular, assumption of control. However, given the unclear rules on bank resolution matters, there are still several issues that need to be addressed, such as the designation of these resolution authorities, the scope of bailout, and the application of resolution powers including bail-in and transfer tools.