PARTICIPANTS

Ken Scott, Kimberly Summe, Tom Jackson, Andrew Crockett, Richard Herring, Bill Kroener, John Taylor, Johannes Stroebel

ADMINISTRATIVE ISSUES DISCUSSED

Next meeting: October 31, 2pm
December 10th Meeting: A full-day conference with the title “Making Failure Tolerable” will be held at Hoover. The meeting will result in a publication similar to “The Road Ahead for the Fed”, with policy makers and their staff as the intended audience. The topics discussed will include and expand on the topics considered by the Resolution Project: It will not just consider Chapter 11 (f), but potentially also increased capital requirements and other proposals.

MAIN DISCUSSION

The group discussed the creation of a set of general criteria to apply to models of failure:

  1. The losses entailed in failure should extend beyond shareholders to creditors in proportion to the extent of loss and seniority of claims.

  2. Procedures regarding dealing with spillovers from failure beyond claimants on the firm need to be established. This may involve giving some party a payment to which it may not be entitled in a strict loss-allocation framework, and may potentially be in conflict with (1). Three relevant examples of such spillovers were considered in detail:
    1. OTC derivatives
    2. Interbank Market Effects
    3. Banks’ dependence on their ability to re-use collateral that clients are posting

      It was decided that the RP needs to rationalize and review the existing categories of who can file for bankruptcy (insurance company, broker, bank holding company)

  3. Efficient liquidation was considered a crucial aspect of a new system for working out failure

  4. Consistency or predictability of regulatory behavior also is a crucial factor.

Upcoming Events

Friday, April 19, 2024
Artificial Intelligence
2024 AI Index Report D.C. Launch
The Hoover Institution and the Stanford Institute for Human-Centered Artificial Intelligence (HAI) invite you to the DC launch of the 2024 AI Index… Hoover Institution In DC
Thursday, April 25, 2024 4:00 PM PT
How Does China Spy on Its People?
Stanford Center on China’s Economy and Institutions and China’s Global Sharp Power Project at the Hoover Institution are pleased to present a special… Encina Hall East, Goldman Conference Room, E409
Monday, April 29, 2024
The Diffusion of New Technologies | Using Text As Data In Policy Analysis
Our 25th workshop features a conversation with Tarek Hassan, Josh Lerner, and Nicholas Bloom on "The Diffusion of New Technologies" on April 29, 2024… Hoover Institution, Stanford University
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