firm is still solvent"--Federal Reserve Bank of Chicago web site …

"Recent evidence suggests that bank regulators appear to be able to resolve insolvent large banks efficiently without … markets. But resolving swap positions at insolvent banks, particularly a bank's out-of- the-money positions, has received less … creditors or transfer the contracts to a solvent bank. Both options have major drawbacks. Terminating contracts abruptly may …

"Bank failures are widely feared for a number of reasons, including concern that depositors may suffer both losses in … regulators to protect all depositors in bank failures. This is likely to increase both moral hazard risk-taking by banks and poor … agency behavior by regulators with large ultimate costs to taxpayers. While ways of reducing the credit loss in bank failures …