Past and future of bankruptcy

In a recent insightful paper, professor Mark Roe (Harvard) reflects on the past and future of bankruptcy. Three ages of bankruptcy are identified and linked to underlying market-based phenomena and institutional conditions (comp., R. Clark, “The Interdisciplinary Study of Legal Evolution”, Yale Law Journal 1981, pp. 1238-1274). The paper also looks forward. New market trends are identified that will shape the future of bankruptcy law. The paper can be read here.

Towards a European covered bond framework

On 18 November 2016, the European Banking Authority (EBA) will be holding a public hearing to outline its draft proposals on the European covered bond framework. A presentation with the outline of the draft proposals on recommended further actions can be consulted here. The EBA report on covered bonds of July 2014, which identified best practices to enhance robustness of the covered bond regulation across the EU, can be read here.

Stealing Deposits: Deposit Insurance, Risk-Taking and the Removal of Market Discipline in Early 20th Century Banks

In a recent paper C.Calomiris (Columbia) and M. Jaremski (Colgate) argue that deposit insurance can reduce liquidity risk, but also can increase insolvency risk by encouraging reckless behavior.

By investigating state deposit insurance experiments in the United States of the early 20th century, they find the introduction of deposit insurance may have actually increased systemic risk, instead of mitigating it (see

The paper also argues that economic models that attempt to explain the attraction of deposit insurance may be less relevant than political ones.


When the Going Gets Tough, the Shareholders Get Going

Last week was a busy week for the Court of Justice (read here and here). A third judgment worth mentioning is the Dowling and Others judgment (read here). This judgment concerns the position of shareholders (of institutions of systemic importance) in times of financial crisis. Continue reading “When the Going Gets Tough, the Shareholders Get Going”

Commercial Law Centre Webinar (University of Oxford)

The Commercial Law Centre (University of Oxford) hosts a series of interesting webinars. Previous webinars dealt with principles of cross-border insolvency law (Reinhard Bork) and form and substance in the determination of property rights (Anthony Duggan).  Continue reading “Commercial Law Centre Webinar (University of Oxford)”

All creditors are equal, but some creditors are more equal than others

Les biens du débiteur sont le gage commun de ses créanciers, et le prix s’en distribue entre eux par contribution, à moins qu’il n’y ait entre les créanciers des causes légitimes de préférence

Article 8 Belgian Loi Hypothécaire (art. 2093 French Civil Code) contains the basic principle of paritas creditorum. All creditors have an equal right to payment and the proceeds of the debtor’s estate shall be distributed in proportion to the size of their claims. The principle of equality is, however, not absolute. Secured and preferred creditors jump the queue, and are paid before ordinary creditors. The pari passu principle still is a bedrock principle of insolvency law. In reality, however, the rule has gradually become the exception (read about the pari passu myth, here). Ordinary creditors are left with peanuts once secured and preferred creditors are paid. All creditors are equal, but some creditors are more equal than others, indeed. Continue reading “All creditors are equal, but some creditors are more equal than others”

The Insolvency Regulation (case-law)

Enefi – article 4 Regulation 1346/2000


In its recent Enefi judgment (C‑212/15, read here, no English translation available yet) the Court of Justice interpreted article 4 of Regulation 1346/2000. The judgment illustrates the shifting boundaries of the framework underlying the Insolvency Regulation.

Continue reading “The Insolvency Regulation (case-law)”