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Norms In Private Insolvency Procedures: The 'London Approach' To The Resolution Of Financial Distress

Author

Listed:
  • John Armour
  • Simon Deakin

Abstract

Law and economics scholarship has recently begun to investigate the role of social norms in shaping actors' incentives. This paper presents empirical findings on the way in which a group of such norms, known collectively as the 'London Approach', guide the resolution of financial distress by creditors of large UK firms and act as a substitute for legal insolvency proceedings. It appears that regulatory pressure applied by the Bank of England may have been critical in 'seeding' these norms. The paper also examines the prospects for the London Approach's future in light of changes in the financial environment brought about by globalisation.

Suggested Citation

  • John Armour & Simon Deakin, 2000. "Norms In Private Insolvency Procedures: The 'London Approach' To The Resolution Of Financial Distress," Working Papers wp173, Centre for Business Research, University of Cambridge.
    • Handle: RePEc:cbr:cbrwps:wp173
    Note: PRO-2
    as

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    File URL: https://www.jbs.cam.ac.uk/cbrwp173/
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    Citations

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    Cited by:

    1. Jérôme Sgard, 2010. "Bankruptcy Law, Majority Rule, and Private Ordering in England and France (Seventeenth-Nineteenth Century)," Working Papers hal-01069444, HAL.
    2. Sgard, Jérôme, 2016. "Courts at work: Bankruptcy statutes, majority rule and private contracting in England (17th–18th century)," Journal of Comparative Economics, Elsevier, vol. 44(2), pages 450-460.
    3. Robert R. Bliss, 2003. "Resolution of large complex financial organizations," Working Paper Series WP-03-07, Federal Reserve Bank of Chicago.

    More about this item

    Keywords

    social norms; corporate insolvency; London Approach; norm seeding;
    All these keywords.

    JEL classification:

    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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