Link to the University of Pittsburgh
Link to the University Library SystemContact us link
AEI Banner

Closing financial institutions on both sides of the Atlantic: Are there differences in approach? CEPS Commentary, 25 February 2015

Krimminger , Michael and Nieto, María J. (2015) Closing financial institutions on both sides of the Atlantic: Are there differences in approach? CEPS Commentary, 25 February 2015. [Policy Paper]

[img] PDF - Published Version
Download (541Kb)

    Abstract

    In the aftermath of the Great Financial Crisis both the EU and the US have implemented resolution procedures for their largest and most systemic financial institutions. This Commentary examines the main differences between the two frameworks. The EU framework allows, inter alia, action to prevent the failure of a credit institution, while the US regulatory framework requires that all systemic banks subject to resolution must be closed and resolved. The greater flexibility under the EU resolution framework allows action to be taken to preserve a credit institution without putting it through an insolvency process, which makes limiting moral hazard less obvious. Moreover, the scope of the EU framework is still narrow, since it does not allow the recovery of non-bank financial institutions, whereas the US framework does.

    Export/Citation:EndNote | BibTeX | Dublin Core | ASCII (Chicago style) | HTML Citation | OpenURL
    Social Networking:
    Item Type: Policy Paper
    Subjects for non-EU documents: EU policies and themes > External relations > EU-US
    EU policies and themes > Policies & related activities > economic and financial affairs > financial crisis 2008-on/reforms/economic governance
    Subjects for EU documents: UNSPECIFIED
    EU Series and Periodicals: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > Centre for European Policy Studies (Brussels) > CEPS Commentaries
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 27 Feb 2015 13:25
    Number of Pages: 5
    Last Modified: 27 Feb 2015 13:25
    URI: http://aei.pitt.edu/id/eprint/62042

    Actions (login required)

    View Item

    Document Downloads