Title: U.S. corporate and bank insolvency regimes
Description: "In the U.S., the insolvency resolution of most corporations is governed by the federal  bankruptcy code and is administered by special bankruptcy courts. Most large corporate  bankruptcies are resolved under Chapter 11 reorganization proceedings. However,  commercial bank insolvencies are governed by the Federal Deposit Insurance Act and are  administered by the FDIC. These two resolution processes--corporate bankruptcy and  bank receiverships--differ in a number of significant ways, including the type of  proceeding (judicial versus administrative); the rights of managers, stockholders and  creditors in the proceedings; the explicit and implicit goals of the resolution; the  prioritization of creditors' claims; the costs of administration; and the timeliness of  creditor payments. These differences derive from perceptions that "banks are special."  This paper elucidates these differences, explores the effectiveness of the procedural  differences in achieving the stated goals, and considers the potential economic  consequences of the different structures."--Federal Reserve Bank of Chicago web site.
Subjects: Bankruptcy, Bank failures
Places: United States