Resolution of Cross-Border Banking Groups

Matthias Haentjens & Bob Wessels (eds.), Research Handbook on Crisis Management in the Banking Sector, Edward Elgar Publishing Ltd, Cheltenham, UK, 2015, Forthcoming

Oxford Legal Studies Research Paper No. 89/2014

35 Pages Posted: 6 Dec 2014

See all articles by Paul L. Davies

Paul L. Davies

University of Oxford- Faculty of Law; European Corporate Governance Institute (ECGI)

Date Written: December 4, 2014

Abstract

This chapter examines the prospects for effective cross-border resolution of failing systemically important banks. It begins by recalling the prevalence of national interests when cross-border banks were resolved in the financial crisis. It notes that in some cases foreign creditors benefitted from nationally-driven action, even if sometimes they did not. However, it concludes that the positive externalities from nationally motivated action are likely to be lower in the future because of the likely lower incidence of bail-outs. It then turns to the prospects of cross-border cooperation both in the case of single point of entry (SPE) and multiple point of entry (MPE) resolutions. It argues that cross-border cooperation will be important to maximise value to creditors in both cases, obviously in the case of MPE but also to an extent that is sometimes not recognised in the case of SPE. Finally, it turns to an assessment of how likely it is that cross-border cooperation will emerge (a) under the FSB Key Attributes and (b) within the European Union, dealing with both the Banking Union and the EU as a whole.

Keywords: banking groups, resolution, cross-border cooperation, FSB, Banking Union

JEL Classification: F36, G18, G21, G33, K22, K33

Suggested Citation

Davies, Paul L., Resolution of Cross-Border Banking Groups (December 4, 2014). Matthias Haentjens & Bob Wessels (eds.), Research Handbook on Crisis Management in the Banking Sector, Edward Elgar Publishing Ltd, Cheltenham, UK, 2015, Forthcoming; Oxford Legal Studies Research Paper No. 89/2014. Available at SSRN: https://ssrn.com/abstract=2534156

Paul L. Davies (Contact Author)

University of Oxford- Faculty of Law ( email )

Harris Manchester College
Oxford, OX1 3TD
United Kingdom

European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

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