- <www.fsa.gov.uk/pages/Library/Communication/Speeches/2011/0218_at.shtml>
- <www.imf.org/external/np/g20/pdf/062710b.pdf>
- C Bates and S Gleeson, “Legal Aspects of Bank Bail-ins” (2011) 5(4) Law and Financial Markets Review 264.
- Or, in technical terms, to restore Pareto optimality to the class of outcomes of individual choices.
- An exposure to an “empty” parent company is said to be structurally subordinated to an exposure to a subsidiary of that parent company. This is because the assets of the subsidiary will be applied fi rst in meeting the claims of creditors of that subsidiary, with any surplus distributed to the parent shareholder and used to meet the claims of the creditors of the parent. The effect is therefore identical to a contractual subordination.
- This is entirely feasible. If a bank has assets of £100 and capital of £10, a loss of £9.99 would reduce the value of its capital to 1% of its original level.
- In particular, if the “old” shareholders can expect to participate in post-intervention gains they may obstruct new capital-raising by the institution concerned.
- See supra n 5.
Law and Financial Markets Review
Volume 6, 2012 - Issue 1