As the last resort to protect the claims of financial institutions, if the insolvency law fails to fully protect the interests of the creditors, non-performing loans and credit risks will probably accumulate in financial institutions. Currently, legislation of the new Enterprise Insolvency Law has entered a critical stage.
Compared with the existing law, the new one (the second draft) on the one hand extends its application by including all the corporate legal entities under its umbrella, and enriches the provisions on insolvency procedures on the other hand by improving the protection of creditors’ rights in every aspect.