A new article by Dr Lerong Lu (King’s College London) and Dr Ci Ren (University of Leeds), titled “Lender of Last Resort in China: Operating Mechanism, Legal Foundation, and the Financial Stability Implication,” has been published in Volume 34 of the Asia Pacific Law Review (2026). The article examines the legal and institutional foundations of China’s lender of last resort regime and evaluates its implications for financial stability.

The article argues that China’s lender of last resort framework has developed with a relatively broad scope, uncertain boundaries, and close connections to wider state rescue functions. It analyses the role of the People’s Bank of China within China’s financial safety net and highlights the importance of clarifying the conditions, scope, and limits of emergency liquidity support.

Drawing on comparative perspectives, the article places China’s regime alongside developments in other major jurisdictions, including the United States and the United Kingdom, and argues that a credible lender of last resort regime supports financial stability not by maximising intervention, but by constraining it through clearer legal and institutional limits.

The publication has also been featured by the Oxford Business Law Blog in a post titled “Why China’s Lender of Last Resort Regime Needs Clearer Limits,” published on 31 March 2026. The Oxford post introduces the paper’s central argument and situates it within broader debates on financial regulation, central banking, and the design of financial safety nets in emerging economies.

The full paper is available at Taylor & Francis: https://www.tandfonline.com/doi/full/10.1080/10192557.2025.2493702

Co-author: Ci Ren, Lecturer in Business Law, University of Leeds School of Law. Lerong Lu is Reader in Law at The Dickson Poon School of Law, King’s College London.