The RTC and the escalating costs of the thrift insurance mess

An examination of the structure of the Resolution Trust Corporation and of its performance in resolving the savings and loan insurance crisis, defining the obstacles that may be impeding the RTC's effectiveness in closing insolvent thrifts and returning their assets to the private sector.Resolution Trust Corporation (U.S.) ; Savings and loan associations

An end to too big to let fail? The Dodd-Frank Act's orderly liquidation authority

One of the changes introduced by the sweeping new financial market legislation of the Dodd–Frank Act is the provision of a formal process for liquidating large financial firms—something that would have been useful in 2008, when troubles at Lehman Brothers, AIG, and Merrill Lynch threatened to damage the entire U.S. financial system. While it may not be the end of the too-big-to-fail problem, the orderly liquidation authority is an important new tool in the regulatory toolkit. It will enable regulators to safely close and wind up the affairs of those distressed financial firms whose failure could destabilize the financial system.Bank failures ; Financial Regulatory Reform (Dodd-Frank Act)

FDICIA's prompt corrective action provisions

A review of the origins of FDICIA's early intervention policy and the political economy arguments for supporting it, with emphasis on the specific sections of the law that pertain to this policy and the ways in which the new guidelines will impact the future of the nation's depositories.Deposit insurance ; Federal Deposit Insurance Corporation Improvement Act of 1991

How well does bankruptcy work when large financial frms fail? Some lessons from Lehman Brothers

There is disagreement about whether large and complex financial institutions should be allowed to use U.S. bankruptcy law to reorganize when they get into financial difficulty. We look at the Lehman example for lessons about whether bankruptcy law might be a better alternative to bailouts or to resolution under the Dodd-Frank Act’s orderly liquidation authority. We find that there is no clear evidence that bankruptcy law is insufficient to handle the resolution of large complex financial firms.Bankruptcy ; Financial risk management

Resolving large, complex financial firms

How to best manage the failure of systemically important financial firms was the theme of a recent conference at which the latest research on the issue was presented. Here we summarize that research, the discussions that it sparked, and the areas where considerable work remains.Banks and banking ; Bank supervision ; Systemic risk ; Financial risk management ; Financial crises - United States

Why charges go to the surface: a generalized Thomson problem

We study a generalization of a Thomson problem of n particles confined to a sphere and interacting by a 1/r^g potential. It is found that for g \le 1 the electrostatic repulsion expels all the charges to the surface of the sphere. However for g>1 and n>n_c(g) occupation of the bulk becomes energetically favorable. It is curious to note that the Coulomb law lies exactly on the interface between these two regimes

Monitoring and controlling bank risk: does risky debt serve any purpose?

To examine whether mandating banks to issue subordinated debt would enhance market monitoring and control risk-taking, the authors extract the credit-spread curve for each banking firm in their sample. After controlling for changes in market and liquidity variables, they find that changes in credit spreads do not reflect changes in bank risk variables. The result is robust to firm type, examination rating, size, leverage, and profitability, as well as to different model specifications. They also find that issuing subordinated debt does not alter banks' risk-taking behavior. They conclude that a mandatory subordinated debt requirement for banks is unlikely to provide the intended benefits of enhancing risk-monitoring or controlling risk-taking.Bank capital ; Risk

Generational research: between historical and sociological imaginations

This paper reflects on Julia Brannen’s contribution to the development of theory and methods for intergenerational research. The discussion is contextualised within a contemporary ‘turn to time’ within sociology, involving tensions and synergies between sociological and historical imagination. These questions are informed by a juxtaposition of Brannen’s four-generation study of family change and social historian Angela Davis’s exploration women and the family in England between 1945 and 2000. These two studies give rise to complementary findings, yet have distinctive orientations towards the status and treatment of sources, the role of geography in research design and limits of generalisatio