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Article: Special Cases: Parent Fails, Bank Lives.(Viewpoints)
- Article from:
- American Banker
- Article date:
- November 11, 2009
- Author:
CopyrightCOPYRIGHT 2009 SourceMedia, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Byline: Karen Shaw Petrou
As Congress considers systemic-risk resolutions, two recent cases show exactly how to wind down big banking organizations without a bailout.
Some have argued that this means no systemic resolution authority is required. However, a close examination of the two cases - CIT and Capmark - shows how different they are from other large, complex banking organizations. Unless or until other banks are disentangled from their nonbanking affiliates, no large bank holding company could go into bankruptcy and leave an operating, viable insured depository.
The ability of CIT and Capmark to file for bankruptcy at the parent level ...