Right of set-off under international financial law

Author: Shen Daming
Publisher:
Publish Date: 1999-05-01
Features: Legal researchers working in foreign legal fields are interested in the subject of offsetting, as there are many unresolved issues in this area. For example, the right of banks to merge customer account numbers is a form of offsetting, or does it arise because the law treats each transaction between the bank and the customer as a single account? If the latter is the case, it should be further asked: does this single account exist from the beginning, or only when the bank exercises the right to merge? Another example is whether offsetting is merely a procedural claim right in litigation, or an substantive defense under the law for the plaintiff's claim right? If it is a substantive defense, further questions arise: once cross-claims exist, does the "claim right cease within this extent, or does this ceasing only occur when the defendant knows the other party claiming offsetting or when the party claiming the right takes some public action to raise it"? For example, the security interest of a bank on the credit balance of a customer's account is a genuine security interest, or a contractual offsetting?