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Abstract from

Bank Groups and Financial Conglomerates, Retooling Resolution Regimes

Janis Sarra is Director of the Peter Wall Institute for Advanced Studies. She is also Professor of Law, Faculty of Law, University of British Columbia and founding Director of the National Centre for Business Law.

This article discusses developments in reforms to the regulation of bank and financial institution resolution regimes in the European Union, the United Kingdom, Canada, and the United States. Resolution regimes are the triage for financial institutions after they experience problems. They work in tandem with measures that require appropriate levels of capitalisation, and are not a substitute for current weaknesses of the system in this respect. While these developments are extraordinary in their breadth, drastic measures were required because of the significance of the losses arising out of the financial crisis. Largely the financial institutions themselves are driving the structures being developed, and while these structures will assist with early financial institution resolution, they will not change fundamental values that underpinned the system that lead to the financial crisis. One normative question that remains to be answered is why, when addressing the collapse of banks, the emphasis has been on the creation of a financial safety net for major banks, with less concern for broader social safety nets for individuals and small businesses harmed by the governance failure of banks.

(2014) Vol 30 Law in Context p7

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