Banking Law
The banking law typically provides for the formation and operation of banks and, sometimes, nonbank financial institutions. The law should deal with the requirements for the opening of a bank; the minimum share of capital; the fit-and-proper criteria for sharehold
ers, managers, directors, and owners of banks; the provisions with respect to terminating licenses; the powers of banks to accept deposits and to carry on banking business; and the prudential supervision of banks, including the obligation on banks to furnish information on their activities regularly to the banking regulator. The law should also deal with distressed banks and with the power of the regulator to implement a range of remedial measures, to withdraw a license, to impose new management, and to ensure orderly liquidation and restructuring with the goal of maintaining financial stability. In addition, the law should deal with issues of confidentiality and bank secrecy. Anti-money-laundering measures are usually enshrined in separate legislation, but this legislation should be closely linked to the banking law framework. The legal aspects of banking supervision have already been considered in detail in chapter 5. The legal and institutional framework for anti-money-laundering activities and for countering the financing of terrorism are covered in chapter 8.
