This paper is concerned with the allegation that fair value accounting rules have contributed significantly to the recent financial crisis. It focuses on one particular channel for that contribution: the impact of fair value on actual or potential failure of banks. The paper compares four...

The collapse of Northern Rock plc in September 2007 as a result of the financial crisis that had its origins in the sub-prime mortgage bubble in the United States focussed attention on the limited nature of governmental powers in the UK to deal with banks in distress or facing insolvency. The...

The passage of the Banking Act 2009 (UK) was a major landmark in the development of legal tools for the handling of banks in financial difficulties in the United Kingdom. The Act has emerged from over a year of economic crisis and from politically charged debates and consultations that followed...

In the aftermath of the global financial crisis the EU bank resolution regime went through fundamental changes that seek to preserve financial stability and ensure continuity of critical functions. The same cannot be said of insolvency rules applicable to non-financial enterprises. Unlike bank...

This paper presents an overview of the Japanese system to deal with the distress of banks, providing a classification of the regulation and remedies based on the level of systemic risk of the troubled entity. The paper differentiates between the types of actions available and analyses in detail...

Conceptually, the ‘resolution' of financial intermediaries does not merely refer to instruments and procedures for the management of insolvencies in the financial sector generally. Rather, ‘resolution' is conceived as a functional alternative to, and substitute for, traditional means of...

Since the enactment of the Dodd-Frank Act in 2010, U.S. bank regulation and bankruptcy have become far more closely intertwined. In this Article, I ask whether the new synthesis of bank regulation and bankruptcy is coherent, and whether it is likely to prove effective.I begin by exploring some...

Under the Basel capital rules for internationally active banks, subordinated debt has always been permitted to contribute a part of the bank's regulatory capital requirements. This is a surprising concession to banks, at first sight, since debt, as a liability, cannot contribute to equity (ie...

Banks are regarded as special institutions, and regulated and supervised heavily than other institutions. However, regulation and supervision cannot achieve zero failure regimes. Banks fail like any other commercial entities, and will continue to fail. Failure of a bank may trigger formal...

In this paper, I suggest that the regulation of the financial system, especially if the aim is to prevent financial crises, should be focused on dealing with the consequences of the crises, not on trying to avoid their causes, although it may seem counterintuitive at first sight. Contrary to the...