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Unformatted text preview: bad loans purchased from state-owned banks. Specific procedures shall be drafted jointly by the
Ministry of Finance and the State Administration of Taxation.
Financial asset management companies shall be exempt from administrative charges such
registration fees at the administration of industry and commerce.
Article 29: Financial asset management companies shall submit financial and statistical reports
as well as other related materials in accordance with the requirements of the PBOC, the Ministry
of Finance, the CSRC and other related departments.
Article 30: Financial asset management companies shall accept the auditing supervision of
auditing authorities according to law.
Financial asset management companies shall invite certified public accountants authorized by the
Ministry of Finance to conduct annual audits of their financial status, and submit the auditing
report to the supervisory and administrative departments. Chapter VI: Termination and Liquidation
Article 31: At the termination of a financial asset management company, the Ministry of
Finance shall organize a team to conduct the liquidation.
Article 32: For the financial losses incurred during the handling of the bad loans by the financial
asset management companies, the Ministry of Finance shall propose a solution to be executed at
the approval of the State Council. Chapter VII: Supplementary Provisions
Article 33: Financial asset management companies violating financial laws and administrative
regulations shall be penalized by the PBOC in accordance with the "Procedures on the
Punishment of Unlawful Financial Practices" and related laws. Those breaking other laws and
administrative regulations shall be penalized by the relevant departments according to law.
Those whose activities constitute a crime shall face criminal responsibility.
Article 34: The Regulations shall take effect as of the date of promulgation. Appendix II: Case Study-The Resolution Trust Corporation (RTC) and S&L Crisis in U.S. In the 80's U.S. Savings and Loans had been released from the bonds of regulated interest rates,
and given new powers to make commercial and consumer loans beyond the boundaries of their
traditional mortgage lending functions. These powers gave them to ability to compete with banks
and money market funds for deposits, and make higher yielding loans in order to offer higher
yields on deposits. The problem was that many of them were small, relatively unsophisticated
financial services companies, with little experience in the types of lending they had undertaken.
When the market took a dive, the lack of experience, overly aggressive lending policies, and
fraudulent use of depositor funds were exposed. The U.S. taxpayers, via the Resolution Trust
Corporation (RTC), funded the bailout. The RTC was created in 1989, through the Financial Institutions Reform, Recovery and
Enforcement Act (FIRREA), which created the RTC to 1. Manage and resolve the affairs of
failed institutions, 2. Maximize the return...
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This document was uploaded on 03/12/2014.
- Spring '14