CFCM 15/08: Bank Insolvencies, Priority Claims and Systemic Risk

Abstract

We review an extensive literature debating the merits of alternative priority structures for banking liabilities put forward by financial economists, legal scholars and policymakers. This work has focused exclusively on the relative advantages of each group of creditors to monitor the activities of bankers. We argue that systemic risk is another dimension that this discussion must include.

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Authors

Spiros Bougheas (Nottingham) and Alan Kirman (Aix-Marseille)

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