New oversight for non-bank financial entities

Former Deputy Comtroller of the Currency Robert Bench, now senior fellow at the BU School of Law’s Morin Center for Banking and Financial Law, says a new financial receivership regime must be created to permit the orderly “wind-down” of assets at non-bank financial institutions — like AIG and hedge funds.

“Use of existing bankruptcy laws for large financial services holding companies, simply, would be a nuclear event for financial markets and the economy because bankruptcy would freeze financial transactions globally.

“Without a federal regime to orderly unwind systemically important financial holding companies, and to escape the nuclear consequences of the applicability of traditional bankruptcy laws, the only option available is to ‘keep the ball in play’ through taxpayer bailouts.”

Contact Robert Bench, 617-353-5428, bobbench@bu.edu

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