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- European Commission, An EU framework for crisis management in the financial sector, communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee, the Committee of the Regions and the European Central Bank, COM(2010) 579 final (Brussels, European Commission), cited at page 2. http://ec.europa.eu/internal_market/bank/docs/crisis-management/framework/com2010_579_en.pdf
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- R Milne, “Eurozone Legacy of Lehman's Fall Paralyses Eurozone”, Financial Times 27 April 2011, www.ft.com/cms/s/0/a0c9fee0-70ef-11e0-962a-00144feabdc0.html#axzz1L6eDzGI0
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- Ibid.
- G Akerlof, “The Market for ‘Lemons’: Quality Uncertainty and the Market Mechanism” (1970) 84(3) Quarterly Journal of Economics 488.
- B Quinn, “The Failure of Private Ordering and the Financial Crisis of 2008” (2009) 5(1) New York University Journal of Law & Business 5 49.
- J Gordon and C Muller, “Avoiding Eight-alarm Fires in the Political Economy of Systemic Risk Management”, Columbia Public Law & Legal Theory Working Paper 9183, draft 1.1 (, Columbia Law School, October 2010) 2–4, http://lsr.nellco.org/cgi/viewcontent.cgi?article=1075&context=columbia_pllt
- W Buiter, “The Fed's moral hazard maximising strategy”, blog (‘willem buiter's maverecon’) Financial Times 6 March 2009, http://blogs.ft.com/maverecon/2009/03/the-feds-moral-hazard-maximising-strategy/#more-719
- Ibid.
- Federal Deposit Insurance Act 1950 (Washington, Federal Deposit Insurance Corporation), www.fdic.gov/regulations/laws/rules/1000-100.html
- Housing and Economic Recovery Act 2008 (Washington, US Government Printing Office), www.gpo.gov/fdsys/pkg/PLAW-110publ289/content-detail.html
- L Wall and D Peterson, “The Effect of Continental Illinois' Failure on the Financial Performance of other Banks” (1990) 26(1) Journal of Monetary Economics 77.
- Y Silva, “The Credit Crisis of 2008, Section XII: The Too Big to Fail Doctrine and the Credit Crisis” (2010) 28 Developments in Banking and Financial Law 115.
- B Bernanke, Statement of Ben S Bernanke, Chairman, Board of Governors of the Federal Reserve System, before the Committee on Banking, Housing, and Urban Affairs (Washington, United States Senate, 3 April 2008), 3.
- Board of Governors, Joint Statement by Treasury, Federal Reserve, and the FDIC on Citigroup (Washington, Federal Exchange, 23 November 2008), www.federalreserve.gov/newsevents/press/bcreg/20081123a.htm
- Silva, supra n 18, 128.
- Board of Governors, supra n 20.
- B Bernanke, “The Federal Reserve and the Financial Crisis: The Federal Reserve's Response to the Financial Crisis”, Lecture 3 (George Washington University School of Business, 27 March 2012), 23. www.federalreserve.gov/newsevents/files/chairman-bernanke-lecture3-20120327.pdf
- J Taylor, Getting off Track: How Government Actions and Interventions Caused, Prolonged and Worsened the Financial Crisis (Hoover Institution Press, 2009).
- K Ayotte and D Skeel, “Bankruptcy or Bailouts?” (2010) 35 Journal of Corporation Law 469.
- Ibid, 490–91.
- D Tarr, “Lehman Brothers and Washington Mutual Show To o Big to Fail is a Myth – a Myth that Prolongs the Recession and Retards Growth” (2010), available at SSRN: http://ssrn.com/abstract=1533522
- Senior Supervisors Group, “Observations on Management of Recent Credit Default Swap Events” (Basel, Financial Stability Forum, 9 March 2009), 3. www.sec.gov/news/press/2009/report030909.pdf
- Ibid.
- A Hood, “Hedge Funds and the Credit Crisis” (2010) 28 Review of Banking and Financial Law 61.
- J Schumpeter, Business Cycles: A Theoretical, Historical, and Statistical Analysis of the Capitalist Process (McGraw-Hill, 1939). Also J Schumpeter, Capitalism, Socialism and Democracy (Harper Torchbooks, 1950).
- Prem Sikka, a Professor of Accounting, has been engaged in a long-running attempt to obtain an unredacted version of the Sandstorm Report on BCCI; see inter alia Sikka v Information Commissioner [2011] UKUT 94 (AAC) GIA/1488/2010 and JR/1600/2010.
- LJ Bingham, Inquiry into the Supervision of the Bank of Credit and Commerce International (HMSO, 1992), www.official-documents.gov.uk/document/hc9293/hc01/0198/0198.pdf. See also K McGuire, “Emergent Trends in Bank Supervision in the United Kingdom” (1993) 56(5) Modern Law Review 669.
- R Herring, “BCCI & Barings: Bank Resolutions Complicated by Fraud and Global Corporate Structure” in D Evanoff and G Kaufman (eds), Systemic Financial Crises: Resolving Large Bank Insolvencies (World Scientific Publishing, 2005), 321.
- Ibid, 328.
- M Brunnermeier, A Crocket, C Goodhart, A Persaud and H Shin, The Fundamental Principles of Financial Regulation, Geneva Reports on the World Economy 11 (Geneva/London, International Center for Monetary and Banking Studies & International Center for Monetary and Banking Studies/Centre for Economic Policy Research, 2006), 3. http://fic.wharton.upenn.edu/fic/Policy%20page/may1/Geneva%20Report%2011_conference%20version.pdf
- Contact Group on the Legal and Institutional Underpinnings of the International Financial System, Insolvency Arrangements and Contract Enforceability (Basel, Bank for International Settlements, September 2002), 27. www.bis.org/publ/gten06b.pdf
- Ibid.
- L Benveniste, M Singh and J Wilhelm, “The Failure of Drexel Burnham Lambert: Evidence on the Implications for Commercial Banks” (1993) 3(1) Journal of Financial Intermediation 104.
- D MacKenzie, “Long-Term Capital Management and the Sociology of Arbitrage” (2003) 32(3) Economy and Society 349.
- Gordon and Muller, supra n 12, 11.
- Ibid.
- J Helwege, “Financial Firm Bankruptcy and Systemic Risk” (2010) 20(1) Journal of International Financial Markets, Institutions and Money 1.
- Bank of England, Financial Stability Report, issue 28 (London, Bank of England, December 2010), 51. www.bankofengland.co.uk/publications/fsr/2010/fsrfull1012.pdf
- P Tucker, Discussion of Lord Turner's Lecture, 2011 Clare Distinguished Lecture (London, Bank of England, 18 February 2011), www.bankofengland.co.uk/publications/speeches/2011/speech477.pdf. See also M Posch, S Schmitz and B Weber, “EU Bank Packages: Objectives and Potential Conflicts of Objectives” (2009) 17 Financial Stability Report (Vienna, Oesterreichische Nationalbank), 63. http://212.39.192.43/en/img/fsr_17_special_topics02_tcm16-140532.pdf
- Milne, supra n 6, 24.
- N Bernstein, “Statement by Governor Nils Bernstein in Conjunction with the Takeover of Amagerbanken by Finan-siel Stabilitet a/s (the Financial Stability Company)” (2011) 1(1) Monetary Review 6 February (Copenhagen, Danmarks Nationalbank), 181. www.statsgaeld.dk/C1256BE9004F6416/side/Monetary_review_2011_1st_Quarter_Part_1/$file/mon_1qtr-part1_2011_web.pdf#page=181
- Cited in Editorial, “Danish Lessons”, Financial Times, 17 May 2011, 8. www.ft.com/intl/cms/s/0/a37f3624-87c8-11e0-a6de-00144feabdc0.html#axzz1QJUcrlSK
- Ibid.
- A Turner, Reforming Finance: Are We Being Radical Enough? 2011 Clare Distinguished Lecture (London, Financial Services Authority, 18 February 2011), 9. www.fsa.gov.uk/pubs/speeches/0218_at_clare_college.pdf
- Ibid.
- Ibid.
- Bank of England Stability Report, supra n 44, 51.
- P Wallison “Did the ‘Repeal’ of Glass–Steagall Have any Role in the Financial Crisis? Not Guilty. Not Even Close” in J Tatom (ed), Financial Market Regulation (Springer, 2011), 19. See also Sullivan & Cromwell LLP, Volcker Rule: Agencies Release Proposed Rule Implementing the Volcker Rule (New York, Sullivan & Cromwell LLP, 12 October 2011), www.sullcrom.com/files/upload/Agencies-Release-Proposed-Rule-Implementing-Volker-Rule.pdf
- Independent Commission on Banking, Issues Paper [and] Call for Evidence (London, ICB, September 2010), http://bankingcom-mission.independent.gov.uk/wp-content/uploads/2010/07/Issues-Paper-24-September-2010.pdf. Also the Interim Report (April 2011), http://s3-eu-west-1.amazonaws.com/htcdn/Interim-Report-110411.pdf. And the Final Report [and] Recommendations (September 2011), http://bankingcommission.s3.amazonaws.com/wp-content/uploads/2010/07/ICB-Final-Report.pdf
- M Barnier, “Press Conference” (Brussels, European Commission, 20 July 2011), http://ec.europa.eu/commission_2010-2014/barnier/docs/news/2011/20110726_crd4_en.pdf. Notwithstanding such interest, the European Commission radiates concern that diverse policy positions might weaken the single market in financial services: the assumption that such convergence is desirable is intrinsic to the working of the European Commission.
- These proposals have been widely discussed, see inter alia C Randell, “The Great British Banking Experiment: Will the Restructuring of UK Banking Show Us How to Resolve G-SIFIs?” (2012) 6(1) Law and Financial Markets Review 39.
- Vickers also made recommendations on capital, which are beyond the scope of the present article. On countercyclical capital buffers the debate not only continues, it freshens: Bank of England, Financial Policy Committee Statement from its Policy Meeting (London, Bank of England, March 2012), www.bankofengland.co.uk/financialstability/Documents/fpc/state-ment120323.pdf
- From the present author's contemporaneous notes made at a seminar on “The Financial System: Options for Reform”, speaker Martin Wolf, on the Interim Report of the Independent Commission on Banking of the United Kingdom, at the Centre for European Policy Studies (CEPS), Brussels, 8 July 2011.
- A Haldane, “Control Rights (and Wrongs)”, speech given by Andrew G Haldane, Executive Director, Financial Stability and Member of the Financial Policy Committee, at the Wincott Annual Memorial Lecture, Westminster, 24 October 2011 (London, Bank of England), www.bankofengland.co.uk/publications/speeches/2011/speech525.pdf. Also A Haldane, “Accounting for Bank Uncertainty“, remarks given at the Information for Better Markets Conference, Institute of Chartered Accountants in England and Wales, 19 December 2011 (London, Bank of England), www.bankofengland.co.uk/publi-cations/speeches/2012/speech540.pdf
- M Čihák and E Nier, “The Need for Special Resolution Regimes for Financial Institutions – the Case of the European Union”, WP 09/2009 (Washington, IMF, September 2009), 6.
- See European Systemic Risk Board, “Introductory Statement to the Press Conference” (ESRB, Frankfurt am Main, 22 June 2011), www.esrb.europa.eu/news/pr/2011/html/is110622.en.html. For a wider review see Clifford Chance, “EU Regulatory Developments” (2011) 5(4) Law and Financial Markets Review 328.
- See work cited in the following paragraphs and, for the EU, see: European Commission 2010, supra n 2. Also: European Commission, Technical Details of a Possible EU Framework for Bank Recovery and Resolution, DG Internal Market and Services working document (Brussels, European Commission, 2011), http://ec.europa.eu/internal_market/consultations/docs/2011/crisis_management/consultation_paper_en.pdf. And: D Schoenmaker, “Banking Supervision and Resolution: The European Dimension” (2012) 6(1) Law and Financial Markets Review 52.
- P Brierley, “The UK Special Resolution Regime for Failing Banks in an International Context” (2009) 5 Financial Stability Paper (London, Bank of England, 2009), 7
- Banking Act 2009 (Stationery Office, London), www.legisla-tion.gov.uk/ukpga/2009/1/pdfs/ukpga_20090001_en.pdf
- D Singh, “The UK Banking Act 2009, Pre-Insolvency and Early Intervention: Policy and Practice (2011) 1 Journal of Business Law 20–42.
- Brierley, supra n 64, 11–12. Needless to say, any such compensation would be subject to the facts in the particular case. For example, in the case of SRM Global Master Fund LP v HM Treasury [2009] EWCA Civ 788, the court held that the equity of Northern Rock was of no value at the time that it was rescued by the UK government.
- Brierely, supra n 64.
- R Krainer, “Regulating Wall Street: The Dodd–Frank Act and the New Architecture of Global Finance, a Review (2012) 8(2) Journal of Financial Stability 121.
- Federal Deposit Insurance Corporation (FDIC), “The Orderly Liquidation of Lehman Brothers Holdings Inc under the Dodd-Frank Act” (2011) 5(2) FDIC Quarterly, early release, Washington, FDIC, www.fdic.gov/bank/analytical/quar-terly/2011_vol5_2/lehman.pdf
- For details, see Ibid.
- S Bair, Remarks by FDIC Chairman Sheila Bair to the Economic Club of New York (Washington, Federal Deposit Insurance Corporation, 27 April 2009), www.fdic.gov/news/news/speeches/archives/2009/spapr2709.html
- Summarised in FDIC, supra n 70, 6.
- As discussed above and see HM Treasury, A New Approach to Financial Regulation: Building a Stronger System, Cm 8012 (London, HM Treasury, 17 February 2011), www.hm-treasury.gov.uk/consult_finreg_strong.htm
- C Leathers and P Raines, “The Schumpeterian Role of Financial Innovations in the New Economy's Business Cycle” (2004) 38(5) Cambridge Journal of Economics 667.
- Akerlof, supra n 10.
Lehman – lemon: “too connected to fail” as a policy construct
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