IDEAS home Printed from https://ideas.repec.org/a/fip/fedhep/y2006iqiip44-55nv.30no.2.html
   My bibliography  Save this article

A comparison of U.S. corporate and bank insolvency resolution

Author

Listed:
  • Robert R. Bliss
  • George G. Kaufman

Abstract

In the U.S., the insolvency resolution of most corporations is governed by the federal bankruptcy code and is administered by special bankruptcy courts. Most large corporate bankruptcies are resolved under Chapter 11 reorganization proceedings. However, commercial bank insolvencies are governed by the Federal Deposit Insurance Act and are administered by the FDIC. These two resolution processes—corporate bankruptcy and bank receiverships—differ in a number of significant ways, including the type of proceeding (judicial versus administrative); the rights of managers, stockholders, and creditors in the proceedings; the explicit and implicit goals of the resolution; the prioritization of creditors’ claims; the costs of administration; and the timeliness of creditor payments. This article elucidates these differences and explores the effectiveness of the procedural differences in achieving the stated goals.

Suggested Citation

  • Robert R. Bliss & George G. Kaufman, 2006. "A comparison of U.S. corporate and bank insolvency resolution," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q II, pages 44-55.
  • Handle: RePEc:fip:fedhep:y:2006:i:qii:p:44-55:n:v.30no.2
    as

    Download full text from publisher

    File URL: http://www.chicagofed.org/digital_assets/publications/economic_perspectives/2006/ep_2qtr2006_part4_bliss_kaufman.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Walker F. Todd, 1994. "Bank receivership and conservatorship," Economic Commentary, Federal Reserve Bank of Cleveland, issue Oct.
    2. George G. Kaufman, 2004. "Depositor Liquidity and Loss Sharing in Bank Failure Resolutions," Contemporary Economic Policy, Western Economic Association International, vol. 22(2), pages 237-249, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bennett, Rosalind L. & Unal, Haluk, 2014. "The effects of resolution methods and industry stress on the loss on assets from bank failures," Journal of Financial Stability, Elsevier, vol. 15(C), pages 18-31.
    2. repec:cbk:journl:v:2:y:2013:i:1:p:81-92 is not listed on IDEAS
    3. Annemarie van der Zwet, 2011. "Crisis Management Tools in the EU: What Do We Really Need?," DNB Occasional Studies 902, Netherlands Central Bank, Research Department.
    4. Marinč, Matej & Rant, Vasja, 2014. "A cross-country analysis of bank bankruptcy regimes," Journal of Financial Stability, Elsevier, vol. 13(C), pages 134-150.
    5. Snezana Popovčić-Avrić & Vule Mizdraković & Marina Đenić, 2013. "Analysis of Financial Structure of the Serbian Banking Sector: Impact of the Financial Crisis," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 2(2), pages 81-92.

    More about this item

    Keywords

    Bankruptcy ; Bank failures;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedhep:y:2006:i:qii:p:44-55:n:v.30no.2. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bernie Flores). General contact details of provider: http://edirc.repec.org/data/frbchus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.