The bank insolvency directive (directive 2001/24/EC) halfway between Scylla (politics) and Charybdis (finance)

A comparative and empirical analysis

Pierre de Gioia-Carabellese

Research output: Contribution to journalArticle

Abstract

Politics, finance and bank insolvency procedures! It is a trite statement that Britain, in 2008, was caught off guard by the financial collapse of its banking sector. The distinct lack of bank insolvency procedures and the scramble to reshape overnight the relevant legal instruments bears testament to the weakness of the system at that time. Yet, this paper, through an analysis that is both doctrinal and empirical, seeks to boldly challenge this assertion. Thus, the lack of bank insolvency procedures, also in part due to the weak harmonisation of the Bank Insolvency Directive (Directive 2001/24/EC), presented the British Government with a stroke of luck and the good fortune to be in a position to re-organise in a more flexible way its banking industry. Accordingly, the significant power left in the hands of the Government, and the de facto public money bail-out, contributed tellingly to the comparatively successful performance that the UK banks are currently demonstrating. Nor has Britain departed from the legacy of the financial crisis: the new Special Resolution Regime, shaped by the Banking Act 2009, still leaves room for significant political discretion. The comparison with Italy, a traditional counterpart manifesting opposing national characteristics, particularly in terms of legal systems and cultural background, may confirm this assumption, rather than dispel it. Ultimately, there are many of the opinion that the legislative framework in this area should be revamped so that a proper harmonisation of the Bank Insolvency Procedures is achieved. The conclusions drawn in this contribution may, however, present a more prudent course of action which is undertaken at the pace of the proverbial snail rather than with the velocity of Achilles.
Original languageEnglish
Pages (from-to)178-194
Number of pages17
JournalLaw and Economics Yearly Review
Volume4
Issue number1
Publication statusPublished - 2015
Externally publishedYes

Fingerprint

insolvency
European Community
bank
finance
politics
banking
harmonization
bail
lack
stroke
legal system
financial crisis
Finance
Empirical analysis
Insolvency
Comparative analysis
Italy
money
act
regime

Cite this

@article{376a36e776814337b5584c527c427408,
title = "The bank insolvency directive (directive 2001/24/EC) halfway between Scylla (politics) and Charybdis (finance): A comparative and empirical analysis",
abstract = "Politics, finance and bank insolvency procedures! It is a trite statement that Britain, in 2008, was caught off guard by the financial collapse of its banking sector. The distinct lack of bank insolvency procedures and the scramble to reshape overnight the relevant legal instruments bears testament to the weakness of the system at that time. Yet, this paper, through an analysis that is both doctrinal and empirical, seeks to boldly challenge this assertion. Thus, the lack of bank insolvency procedures, also in part due to the weak harmonisation of the Bank Insolvency Directive (Directive 2001/24/EC), presented the British Government with a stroke of luck and the good fortune to be in a position to re-organise in a more flexible way its banking industry. Accordingly, the significant power left in the hands of the Government, and the de facto public money bail-out, contributed tellingly to the comparatively successful performance that the UK banks are currently demonstrating. Nor has Britain departed from the legacy of the financial crisis: the new Special Resolution Regime, shaped by the Banking Act 2009, still leaves room for significant political discretion. The comparison with Italy, a traditional counterpart manifesting opposing national characteristics, particularly in terms of legal systems and cultural background, may confirm this assumption, rather than dispel it. Ultimately, there are many of the opinion that the legislative framework in this area should be revamped so that a proper harmonisation of the Bank Insolvency Procedures is achieved. The conclusions drawn in this contribution may, however, present a more prudent course of action which is undertaken at the pace of the proverbial snail rather than with the velocity of Achilles.",
author = "Gioia-Carabellese, {Pierre de}",
year = "2015",
language = "English",
volume = "4",
pages = "178--194",
journal = "Law and Economics Yearly Review",
issn = "2050-9014",
publisher = "Queen Mary, University of London - School of Law",
number = "1",

}

The bank insolvency directive (directive 2001/24/EC) halfway between Scylla (politics) and Charybdis (finance) : A comparative and empirical analysis. / Gioia-Carabellese, Pierre de.

In: Law and Economics Yearly Review, Vol. 4, No. 1, 2015, p. 178-194.

Research output: Contribution to journalArticle

TY - JOUR

T1 - The bank insolvency directive (directive 2001/24/EC) halfway between Scylla (politics) and Charybdis (finance)

T2 - A comparative and empirical analysis

AU - Gioia-Carabellese, Pierre de

PY - 2015

Y1 - 2015

N2 - Politics, finance and bank insolvency procedures! It is a trite statement that Britain, in 2008, was caught off guard by the financial collapse of its banking sector. The distinct lack of bank insolvency procedures and the scramble to reshape overnight the relevant legal instruments bears testament to the weakness of the system at that time. Yet, this paper, through an analysis that is both doctrinal and empirical, seeks to boldly challenge this assertion. Thus, the lack of bank insolvency procedures, also in part due to the weak harmonisation of the Bank Insolvency Directive (Directive 2001/24/EC), presented the British Government with a stroke of luck and the good fortune to be in a position to re-organise in a more flexible way its banking industry. Accordingly, the significant power left in the hands of the Government, and the de facto public money bail-out, contributed tellingly to the comparatively successful performance that the UK banks are currently demonstrating. Nor has Britain departed from the legacy of the financial crisis: the new Special Resolution Regime, shaped by the Banking Act 2009, still leaves room for significant political discretion. The comparison with Italy, a traditional counterpart manifesting opposing national characteristics, particularly in terms of legal systems and cultural background, may confirm this assumption, rather than dispel it. Ultimately, there are many of the opinion that the legislative framework in this area should be revamped so that a proper harmonisation of the Bank Insolvency Procedures is achieved. The conclusions drawn in this contribution may, however, present a more prudent course of action which is undertaken at the pace of the proverbial snail rather than with the velocity of Achilles.

AB - Politics, finance and bank insolvency procedures! It is a trite statement that Britain, in 2008, was caught off guard by the financial collapse of its banking sector. The distinct lack of bank insolvency procedures and the scramble to reshape overnight the relevant legal instruments bears testament to the weakness of the system at that time. Yet, this paper, through an analysis that is both doctrinal and empirical, seeks to boldly challenge this assertion. Thus, the lack of bank insolvency procedures, also in part due to the weak harmonisation of the Bank Insolvency Directive (Directive 2001/24/EC), presented the British Government with a stroke of luck and the good fortune to be in a position to re-organise in a more flexible way its banking industry. Accordingly, the significant power left in the hands of the Government, and the de facto public money bail-out, contributed tellingly to the comparatively successful performance that the UK banks are currently demonstrating. Nor has Britain departed from the legacy of the financial crisis: the new Special Resolution Regime, shaped by the Banking Act 2009, still leaves room for significant political discretion. The comparison with Italy, a traditional counterpart manifesting opposing national characteristics, particularly in terms of legal systems and cultural background, may confirm this assumption, rather than dispel it. Ultimately, there are many of the opinion that the legislative framework in this area should be revamped so that a proper harmonisation of the Bank Insolvency Procedures is achieved. The conclusions drawn in this contribution may, however, present a more prudent course of action which is undertaken at the pace of the proverbial snail rather than with the velocity of Achilles.

UR - https://www.scopus.com/record/display.uri?eid=2-s2.0-84944736902&origin=inward&txGid=0401c853da3c299b066574c1fdcace78

M3 - Article

VL - 4

SP - 178

EP - 194

JO - Law and Economics Yearly Review

JF - Law and Economics Yearly Review

SN - 2050-9014

IS - 1

ER -