Riksbank and ECB Conference on Bank Resolution, 14 November 2011
Location: Clarion Sign Hotel, Stockholm
Östra Järnvägsgatan 35, Stockholm
By invitation only
The latest version of the program can be found at:
The financial crisis during the last 3-4 years has clearly demonstrated that banks in distress are different from other companies. It has also been clear that many countries lacked an efficient framework for dealing with banks in distress. Since the crisis, several countries (i.e. the UK and the US) have changed their bank resolution frameworks and in the fall of 2011 the European Commission plans to present a resolution framework for the EU. There are several similarities between these approaches but also important differences. Furthermore, the academic interest in bank resolution frameworks has increased substantially after the crisis. These developments beg a number of questions such as which criteria an optimal bank resolution regime will have to fulfill, how the recent changes and proposals comply with these criteria, how different stakeholders should be treated and how cross-border banks should be dealt with. The purpose of this conference is to bring together a number of leading academics and high-level policy makers to discuss these issues in an interactive manner.
18.30 – 20.30 Reception
There will be a light buffet in the hotel lounge at floor 2 at Clarion Hotel Sign.
08.30 – 09.00 Registration - Coffee
09.00 – 09.05 Opening Remarks: Stefan Ingves (Governor Sveriges Riksbank)
Session 1 – 09.05-10.25 – Criteria for a good bank resolution regime
Chair: Pedro Gustavo Teixeira (ECB) (TBC)
Anil Kashyap (University of Chicago)
Viral Acharya (New York University)
Issues to be discussed include but are not limited to: Why do we need a separate resolution regime for banks? Which criteria should a good banks resolution regime fulfill? How do we deal with moral hazard and agency problems? What should the relationship be to normal bankruptcy laws? When should the resolution be triggered? Should the trigger be based on capital adequacy (at what level) or should other indicators be used? What type of tools should a resolution regime be able to use? Should the rules be transparent or should focus be on authorities’ discretion? What are the effects ex ante of information about resolutions regimes?
Coffee 10.25 - 10.45
Session 2 – 10.45-12.15 – Resolution regimes in the US, the UK and EU
Chair: Irma Rosenberg (Swedish Government Inquiry “Finanskriskommittén”)
Michael Krimminger (FDIC)
Peter Brierley (Bank of England)
Nicolas Véron (Bruegel)
Issues to be discussed include but are not limited to: How did the US and the UK deal with problem banks (Northern Rock, Bear Stearns etc.) and what can we learn from that? What are the important features of the US resolution regime (both old and new)? What are the important features of the UK SRR? What are the important ideas supporting the tentative EU resolution regime?
Lunch 12.15 - 13.30
Session 3 – 13.30-14.50 – How to treat different stakeholders in bank restructuring
Chair: Olga Szczepanska (National Bank of Poland)
Mathias Dewatripont (National Bank of Belgium)
Elena Carletti (European University Institute)
Issues to be discussed include but are not limited to: How should any government measures be financed? (ex ante, ex post, from industry or?) When a bank faces problems, how do you set the value of the problem assets? How do you manage a bridge bank? Should the junior bond holders bear losses (write downs)? Should the senior bond holders bear losses (write downs)? How do you treat existing shareholders? Are there cases where the existing shareholders should remain as shareholders, if so which cases? Should the state (have the possibilities to) recapitalise the bank and if so, why, when and how?
Coffee 14.50 - 15.10
Session 4 – 15.10-16.30 – How to resolve cross-border banks?
Chair: Andreas Ittner (Oesterreichische Nationalbank)
Alan Morrison (Oxford University)
Dirk Schoenmaker (Duisenberg School of Finance)
Issues to be discussed include but are not limited to: What are the additional complications in a cross-border framework? What are the pros and cons of asset transfers vs ring fencing? What are the pros and cons of national vs universal legislation?
Session 5 – 16.30-17.30 – Panel discussion
Chair: Lars Nyberg (Sveriges Riksbank)
Viral Acharya, Elena Carletti, Anil Kashyap, Johanna Lybeck Lilja (Ministry of Finance, Sweden), Peter Praet (ECB)
Dinner 19.30: Sjöfartshuset, Skeppsbron 10, 111 30 Stockholm
Hosted by: Lars Nyberg
Key Note Speech: Vitor Constâncio (Vice-President of the European Central Bank)
Any queries can be addressed to: [email protected]