FRINK Linked Data Fragments server

Matches in SemOpenAlex for { <https://semopenalex.org/work/W3121571659> ?p ?o ?g. }

• W3121571659 startingPage "723" @default.
• W3121571659 abstract "David A. Skeel, Jr.* Introduction The central assumption of bank and insurance insolvency regulation has long been that regulators must control every facet of the insolvency process. With both banks and insurance companies, regulators decide when to initiate an insolvency proceeding and how to dispose of the failed firm's assets, and they control nearly every decision in between.1 The explanation for this assumption is simple. Because banks, insurance companies, and related financial intermediaries play an important role in the financial security of the citizenry, the government has a strong interest in assuring their soundness and in preventing the kinds of systemic failures that led to financial devastation in the Depression. Unlike some academic commentators, I do not take issue with the traditional justification for regulating banks and insurance companies. I am persuaded that the risk of bank runs and policyholder flight is genuine, and I agree that deposit insurance and other regulatory interventions play a necessary and important role. Moreover, it seems quite unrealistic to suggest that lawmakers jettison the existing framework, given the political implausibility that lawmakers would shift gears so dramatically. Accepting the public-interest justification for regulatory oversight does not mean that regulators should control the entire process, however. Quite to the contrary. I hope to show in this Article that diminishing regulators' role in several important respects, while retaining the basic contours of the existing framework, would dramatically improve the effectiveness of the bank and insurance company insolvency process. The point on which much of the analysis pivots is the rule in both bank and insurance law that only regulators can initiate an insolvency proceeding.2 If regulators were fully informed and had appropriate incentives to initiate in a timely fashion, their monopoly over initiation would make perfect sense. Regulators' role in monitoring solvent firms does give them significant information, but because failures may reflect badly on the regulators themselves, they have strong incentives to delay taking action against troubled banks and insurance companies. There are good reasons to prefer that failures take place on someone else's watch, which seems to many observers to explain regulators' actions during the bank and insurance insolvency crises of the 1980s. If regulators draw, at best, mixed reviews as initiators, to whom may we turn to achieve a better result? The answer, in my view, is managers. Managers are even better informed than regulators and are particularly well positioned to know when a troubled firm belongs in an insolvency proceeding. The obvious problem with turning to managers is that managers have precious little incentive to contribute to the initiation decision.3 Given that insolvency generally means immediate termination of a manager's job and elimination of the value of her stock, managers will resist initiation rather than signal when the time for an insolvency proceeding has come. Yet this problem is far from fatal. Finance theory suggests that lawmakers, or banks and insurance companies themselves, could develop relatively simple mechanisms for realigning managers' incentives. I argue in particular that offering managers a phantom debt interest in the firm or providing a shareholder bonus in connection with an insolvency proceeding would give managers a strong incentive to contribute to the initiation decision. If the analysis stopped here, its conclusions could perhaps be dismissed as a characteristically unrealistic academic proposal. But my assessment of the disposition options in bank and insurance insolvency proceedings not only suggests several potential reforms, but it also provides an alternative justification for managerial initiation. I begin with the observation that neither bank nor insurance insolvency law includes a traditional reorganization option. …" @default.
• W3121571659 created "2021-02-01" @default.
• W3121571659 creator A5003806138 @default.
• W3121571659 creator A5040976125 @default.
• W3121571659 date "1998-03-01" @default.
• W3121571659 modified "2023-09-23" @default.
• W3121571659 title "The Law and Finance of Bank and Insurance Insolvency Regulation" @default.
• W3121571659 hasPublicationYear "1998" @default.
• W3121571659 type Work @default.
• W3121571659 sameAs 3121571659 @default.
• W3121571659 citedByCount "6" @default.
• W3121571659 countsByYear W31215716592013 @default.
• W3121571659 countsByYear W31215716592018 @default.
• W3121571659 crossrefType "journal-article" @default.
• W3121571659 hasAuthorship W3121571659A5003806138 @default.
• W3121571659 hasAuthorship W3121571659A5040976125 @default.
• W3121571659 hasConcept C10138342 @default.
• W3121571659 hasConcept C144133560 @default.
• W3121571659 hasConcept C162324750 @default.
• W3121571659 hasConcept C17744445 @default.
• W3121571659 hasConcept C190253527 @default.
• W3121571659 hasConcept C199539241 @default.
• W3121571659 hasConcept C2777817046 @default.
• W3121571659 hasConcept C4163816 @default.
• W3121571659 hasConcept C73283319 @default.
• W3121571659 hasConceptScore W3121571659C10138342 @default.
• W3121571659 hasConceptScore W3121571659C144133560 @default.
• W3121571659 hasConceptScore W3121571659C162324750 @default.
• W3121571659 hasConceptScore W3121571659C17744445 @default.
• W3121571659 hasConceptScore W3121571659C190253527 @default.
• W3121571659 hasConceptScore W3121571659C199539241 @default.
• W3121571659 hasConceptScore W3121571659C2777817046 @default.
• W3121571659 hasConceptScore W3121571659C4163816 @default.
• W3121571659 hasConceptScore W3121571659C73283319 @default.
• W3121571659 hasIssue "4" @default.
• W3121571659 hasLocation W31215716591 @default.
• W3121571659 hasOpenAccess W3121571659 @default.
• W3121571659 hasPrimaryLocation W31215716591 @default.
• W3121571659 hasRelatedWork W121397990 @default.
• W3121571659 hasRelatedWork W123252154 @default.
• W3121571659 hasRelatedWork W1535606159 @default.
• W3121571659 hasRelatedWork W1557987171 @default.
• W3121571659 hasRelatedWork W1595665395 @default.
• W3121571659 hasRelatedWork W178180855 @default.
• W3121571659 hasRelatedWork W1953663469 @default.
• W3121571659 hasRelatedWork W2127949852 @default.
• W3121571659 hasRelatedWork W2464783626 @default.
• W3121571659 hasRelatedWork W2783687508 @default.
• W3121571659 hasRelatedWork W3026572037 @default.
• W3121571659 hasRelatedWork W3122059350 @default.
• W3121571659 hasRelatedWork W3122905168 @default.
• W3121571659 hasRelatedWork W3122943085 @default.
• W3121571659 hasRelatedWork W3123665537 @default.
• W3121571659 hasRelatedWork W3124379218 @default.
• W3121571659 hasRelatedWork W4789364 @default.
• W3121571659 hasRelatedWork W63249839 @default.
• W3121571659 hasRelatedWork W1849057130 @default.
• W3121571659 hasRelatedWork W31167855 @default.
• W3121571659 hasVolume "76" @default.
• W3121571659 isParatext "false" @default.
• W3121571659 isRetracted "false" @default.
• W3121571659 magId "3121571659" @default.
• W3121571659 workType "article" @default.