New Bank Insolvency Law for China and Europe – Volume 3: Comparative Analysis is the third and the last volume of the series New Bank Insolvency Law for China and Europe, which is the result of a research project carried out by academics from the China University of Political Science and Law in China and the University of Leiden in the Netherlands. Building on the previous two volumes of this series, which are focused on bank insolvency laws in China and the EU respectively, this book, authored by Professor Matthias Haentjens, Dr Shuai Guo and Emeritus Professor Bob Wessels, conducts a comparative study of China and the EU. This is the first work that seeks to do so.

This volume, following the structure of the previous two volumes, consists of 11 chapters. After a general introduction to bank insolvency laws in the global context in Chapter 1, an overview of bank insolvency laws in China and the EU is presented in Chapter 2. The subsequent 8 chapters present a comprehensive comparison of existing laws and practices in China and the EU, focusing upon eight aspects, ie: institutional framework; insolvency proceedings; management of failing banks; bail-in; contracts; judicial review; deposit guarantee schemes; and cross-border issues. The final chapter concludes with the authors’ expectation that China and the EU should learn from each other when developing their bank insolvency systems, and should also work collaboratively on cross-border matters in cases where international banks run into trouble.

In this series, ‘bank insolvency’ is used as an umbrella term, which encompasses the concept of ‘bank resolution’ proposed by the Financial Stability Board (FSB) in the Key Attributes of Effective Resolution Regimes for Financial Institutions (the ‘Key Attributes’). As stated by the authors, ‘the resolution proceeding is one type of special insolvency proceedings, to be more specific, one type of reorganisation proceedings’ (65). However, most discussions revolve around ‘bank resolution’, and not much attention has been paid to traditional insolvency proceedings. Admittedly, this is the most expedient way to carry out a comprehensive comparison of the bank insolvency systems in the EU and China at this stage. This is because it is only the bank resolution regime, which is largely in line with the FSB's Key Attributes, that has been harmonised at the EU level by virtue of the 2014 Bank Recovery and Resolution Directive, as well as the 2014 Single Resolution Mechanism Regulation (for members of the banking union). Other insolvency proceedings applicable to banks are still governed by the national laws of the Member States. As a consequence, it would be too onerous to consider national insolvency proceedings in this comparative study. Also, from the perspective of China, since there are few provisions adapting the normal insolvency system for banks, insolvency proceedings for banks are largely the same as those for other companies. The existing legislation in China is still far from adequate to guide bank insolvency proceedings and, more commonly, bank crises would be resolved through regulatory measures, similar to resolution measures in the EU. Taken together, although not fully covering ‘bank insolvency’ (in a strict sense), it is still fair to say that this volume does present a comprehensive comparison of the current bank insolvency systems in China and the EU.

This book not only systemically discusses the developments in bank insolvency systems in both China and the EU, as of March 2021, but also clearly points out the similarities and differences between them. It should be a springboard for further research that seeks to improve upon the status quo in these two jurisdictions. For example, since China lags behind the EU in developing a systemic resolution regime in line with the Key Attributes proposed by the FSB, the extent to which China can learn from the EU experience deserves to be further explored. Given the fact that China's banking system is different from that in the EU, how this may contribute to the Chinese characteristics of the bank insolvency system requires special consideration. Another example concerns how to design ‘resolution’ and then coordinate ‘resolution’ and ‘insolvency’ within a jurisdiction, which also merits thoughtful consideration. It is questionable whether it is desirable for the EU to have a resolution regime which can be applied to troubled banks only when the public interest is jeopardised. There seems no persuasive reason why ‘resolution’ cannot be used to deal with crises experienced by other banks. Thus, it is arguable that having a single mechanism applicable to all bank crises, with resolution measures and modified insolvency proceedings combined cohesively, may be a better option for a certain jurisdiction. These are just two examples among numerous issues in this area which are worth researching in the future.

Building on the previous two volumes, this third volume completes the series New Bank Insolvency Law for China and Europe. Representing a joint effort of professionals from both China and the EU, this series is a good resource for understanding the current bank insolvency systems in these two jurisdictions. The additional challenges brought about by the Covid-19 pandemic increases the importance of this. The book certainly deserves a place on the bookshelf of a researcher with a focus on bank insolvency and those interested in exploring what will happen when a bank fails in two of the world's largest economies, China and the EU.