ABSTRACT

Insolvency of Systemically Significant Financial Companies: Bankruptcy vs. Conservatorship/Receivership [April 20, 2009]   [open pdf - 172KB]

"This report first discusses the purposes behind the creation of a separate insolvency regime for depository institutions. The report then compares and contrasts the characteristics of depository institutions with SSFCs [Systemically Significant Financial Companies]. Next, the report provides a brief analysis of some important differences between the FDIC's [Federal Deposit Insurance Corporation] conservatorship/receivership authority and that of the Bankruptcy Code. The specific differences discussed are: (1) overall objectives of each regime; (2) insolvency initiation authority and timing; (3) oversight structure and appeal; (4) management, shareholder, and creditor rights; (5) FDIC 'superpowers,' including contract repudiation versus Bankruptcy's automatic stay; and (6) speed of resolution. This report makes no value judgment as to whether an insolvency regime for SSFCs that is modeled after the FDIC's conservatorship/receivership authority is more appropriate than using (or adapting) the Bankruptcy Code. Rather, it simply points out the similarities and differences between SSFCs and depository institutions, and compares the conservatorship/receivership insolvency regime with the Bankruptcy Code to help the reader develop his/her own opinion."

Report Number:
CRS Report for Congress, R40530
Author:
Publisher:
Date:
2009-04-20
Copyright:
Public Domain
Retrieved From:
U.S. Dept. of State, Foreign Press Centers: http://www.fpc.state.gov/
Format:
pdf
Media Type:
application/pdf
URL:
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