Law Commons^™

The History And Rationale For A Separate Bank Resolution Process, Thomas Fitzpatrick, Moira Kearney-Marks, James Thomson

James B Thomson

Everyone recognizes the need to have a credible resolution regime in place for fi nancial companies whose failure could harm the entire financial system, but people disagree about which regime is best. The emergence of the parallel banking system has led policymakers to reconsider the dividing line between fi rms that should be resolved in bankruptcy and firms that should be subject to a special resolution regime. A look at the history of insolvency resolution in this country suggests that a blended approach is worth considering. Activities that have potential systemic impact might be best handled administratively, while all other …