Common Capital: A Thought Experiment in Cross-Border Resolution

30 Pages Posted: 4 Mar 2015

See all articles by Anna Gelpern

Anna Gelpern

Georgetown University Law Center

Date Written: May 23, 2014

Abstract

Cross-border bank resolution efforts focus on burden-sharing between bank owners, private creditors and the public. There is little talk of burden-sharing among governments, despite the rich history of governments trying to stick one another with the cost of financial conglomerate failures. There is an unspoken fear that acknowledging the need to allocate losses among governments would undermine post-crisis pledges of No More Bailouts. This symposium essay argues for making government stakes in private financial firms more transparent, and for using the contingent public share as a key to loss allocation among governments in cross-border banking crises.

Keywords: bank failure, common capital, cross-border banking, bailout, government commitments

JEL Classification: F33, K12, K33, K39

Suggested Citation

Gelpern, Anna, Common Capital: A Thought Experiment in Cross-Border Resolution (May 23, 2014). Texas International Law Journal, Vol. 49, pp. 355-383, 2014. Available at SSRN: https://ssrn.com/abstract=2572392

Anna Gelpern (Contact Author)

Georgetown University Law Center ( email )

600 New Jersey Avenue, NW
Washington, DC 20001
United States

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