Financial Stability Review
Financial Crisis Management Articles
2002
2005 2004 2003 2002 2001 2000 1999 1998
The
Economics of Insolvency Law: Conference Summary
(51k)
(Issue 13, December 2002)
Bethany Blowers, Domestic Finance Division,
Bank of England
Insolvency and bankruptcy law affect both financial stability and the efficiency of the financial system. Ex ante, bankruptcy law affects entrepreneurs' incentives to take risk - and so can affect productivity - and the terms on which lenders will lend. Ex post, it provides the framework in which bankruptcies, whether localised or potentially systemic, are resolved. On 27 September 2002, the Bank of England held a conference entitled The Economics of Insolvency Law: Effects on Debtors, Creditors and Enterprise, which addressed these two themes. The conference also discussed public bankruptcy policy, in the light of the publication this year of the Government's Enterprise Act, which includes a number of proposals for UK policy changes in this area. Although the focus of the conference was on corporate and personal bankruptcy, many of the themes discussed are relevant also to sovereign debt workouts, where much work is currently being done in international forums on appropriate policies for crisis resolution.
Fixing
Financial Crises
(55k)
(Issue 13, December 2002)
Andrew G Haldane, International Finance Division,
Bank of England
On 23-24 July 2002, the Bank of England hosted a conference on 'The Role of the Official and Private Sectors in Resolving International Financial Crises'. The papers from that conference are available on this website. This short article summarises some of the key themes.
Spillovers
from Recent Emerging Market Crises: What Might Account for Limited
Contagion from Argentina?
(84k)
(Issue 12, June 2002)
The current crisis in Argentina has been notable for the lack of substantial spillovers to other emerging market economies (EMEs), particularly relative to earlier episodes of EME turbulence such as the crisis in Asia in 1997/98. This article considers factors that might account for this change. One is that investors have differentiated more between the crisis economy and other EME credits than during earlier crises, perhaps because of shifts in the composition of the EME investor base and widespread anticipation of the Argentine crisis. Another is that the vulnerability to shocks of those EMEs with close trade and financial ties to Argentina is lower than was the case in previous crises such as Thailand in 1997. Changes in investor behaviour may mean that contagious crises are less likely in the future. However if limited spillovers partly reflect the lower fragility of EMEs closely linked to Argentina, then future problems in other EMEs might still result in contagion.
Key Resources
|
Memorandum of Understanding between HM Treasury,
the Bank of England and the Financial Services Authority
Download PDF (50k) |
