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Campbell, Andrew; Moffatt, Paula --- "Large scale bank insolvencies and the challenges ahead" [2015] ELECD 1241; in Haentjens, Matthias; Wessels, Bob (eds), "Research Handbook on Crisis Management in the Banking Sector" (Edward Elgar Publishing, 2015) 55

Book Title: Research Handbook on Crisis Management in the Banking Sector

Editor(s): Haentjens, Matthias; Wessels, Bob

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781783474226

Section: Chapter 4

Section Title: Large scale bank insolvencies and the challenges ahead

Author(s): Campbell, Andrew; Moffatt, Paula

Number of pages: 24

Abstract/Description:

The recent global financial crisis was very damaging to the global economy and adversely affected all countries to some extent with many banks in a number of countries experiencing financial distress. Within the European Union (‘EU’), between October 2008 and the end of December 2012, €591.9 billion (4.6 per cent of EU GDP for 2012) was given in public support for banks. Prior to the onset of the crisis, bank insolvency had not really been on the agenda in many countries in Europe or elsewhere, although since the 1930s it has continually been an issue in the United States (‘US’). As will be seen later in this Chapter many of the recent developments in relation to bank insolvency law have been significantly influenced by the US approach. Bank insolvency has been on the agenda of the International Monetary Fund (‘IMF’) since the 1980s and, as part of the conditionality requirements for receiving financial assistance, countries have often been required to introduce law reforms. In many cases, this required the banking laws to be amended and modernised and this typically included bank insolvency procedures which would provide for alternatives, in appropriate situations, to the liquidation of a financially distressed bank.4 The World Bank has also done significant work on this area and, together with the IMF, published a joint report on bank insolvency in 2009 (the ‘IMF/World Bank Report’).