Building a Framework to Address Failure of Complex Global Financial Institutions
Douglas W. Arner
University of Hong Kong - Faculty of Law; Centre for International Finance and Regulation (CIFR)
Joseph Jude Norton
Southern Methodist University - Dedman School of Law
May 1, 2009
Hong Kong Law Journal, Vol. 39. pp. 95-128, 2009
SMU Dedman School of Law Legal Studies Research Paper No. 47
The systemic phase of the current global financial crisis was triggered by the failure of large complex global financial institutions (LCGFIs). In this context, as recognised by the Group of 20, one of the greatest failures of both international and domestic legal and regulatory systems has been the lack of appropriate arrangements, including adequate insolvency arrangements, to address such failures when they occur. Following a discussion of the difficulties of dealing with the failure of large complex global financial conglomerates, the article discusses advocates a framework based upon prevention of failure as the first element and mechanisms to address failure when they occur as the second framework. The article concludes that while it may be possible to develop adequate international arrangements relating to prevention, there is still insufficient consensus in respect of actual insolvency arrangements for any international framework to emerge at present.
Number of Pages in PDF File: 37
Keywords: LCFI, large complex financial institution, G20, Financial Stability Forum, insolvency, deposit insuranceAccepted Paper Series
Date posted: April 7, 2009 ; Last revised: February 21, 2011
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