When trust is not enough: Bank resolution, SPE, Ring-fencing and group support

Mathias Dewatripont (), Marie Montigny () and Gregory Nguyen ()
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Mathias Dewatripont: Solvay Brussels School and ECARES, Université Libre de Bruxelles
Marie Montigny: European Coordination, NBB
Gregory Nguyen: Resolution unit, NBB

No 403, Working Paper Research from National Bank of Belgium

Abstract: This discussion paper investigates the differences existing between the Single Point of Entry and the Multiple Point of Entry resolution models and links this question to the issue of support that bank subsidiaries can expect from their parent companies both in resolution and in normal insolvency proceedings. Given that parental support remains imperfect in these two resolution models, the paper concludes that existing safeguards aiming at preserving the corporate interests of subsidiaries remain needed and justified. The paper then identifies potential avenues that could be further explored to reinforce the support model and thereby reduce incentives to adopt ring-fencing measures.

Keywords: Bank; resolutionSPEbanking; crisisbail-inbankruptcy (search for similar items in EconPapers)
JEL-codes: G10 G21 G28 K22 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2021-08
New Economics Papers: this item is included in nep-law
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Persistent link: https://EconPapers.repec.org/RePEc:nbb:reswpp:202108-403

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