The choice between judicial and administrative sanctioned procedures to manage liquidation of banks: a transatlantic perspective

Abstract

This article analyses the EU and US approaches to bank insolvency and reflects on the effectiveness of insolvency procedures for banks (and their holding companies in the United States), as well as on the advantages and disadvantages of a dual system that includes an administrative authority and court-based procedures. The article also analyses the need for coordination through harmonization in the EU, and especially in the euro area, and the need for enhanced substantive coordination with a view to development of the European Deposit Insurance System (EDIS). The article first presents the current state of debate of the EU versus US approaches to bank insolvency, then analyses the effectiveness of ‘dual’ administrative and court-based bank liquidation procedures for the purpose of both coordination within the EU and cross-border coordination, before providing conclusions and policy implications.