Cross-Border Resolution of Financial Institutions: Perspectives from International Insolvency Law
Shuai Guo, Cross-border Resolution of Financial Institutions: Perspectives from International Law, 27 J. Bankr. L. & Prac. 481 (2018)
Posted: 10 Oct 2018 Last revised: 17 Nov 2018
Date Written: March 31, 2018
This paper examines the issues regarding the cross-border resolution of financial institutions, focusing on the power allocation between the home and host resolution authorities, i.e. the jurisdiction rule. The research is conducted from the international insolvency law perspective. A modified universalism approach is chosen, taken into account the balance of conflict of interests between effective resolution and protection of local interests. Regarding the parent-branch resolution, the home authority should be able to commence a main resolution proceeding, while the host authority should be able to commence either a supportive secondary resolution proceeding or an independent secondary resolution proceeding. Regarding the parent-subsidiary resolution, in spite of the desire to take a global resolution action, the current legal framework only allows a host resolution proceeding for foreign subsidiaries. This paper continues to propose the application of the head office functions test developed in the international insolvency law, so that foreign subsidiaries can be subject to the home main resolution proceeding.
Keywords: cross-border resolution, financial institutions, international insolvency law, modified universalism
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