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Cross-border Resolution of Financial Institutions: Perspectives from International Insolvency Law

This publication examines the issues regarding the cross-border resolution of financial institutions, focusing on the power allocation between the home and host resolution authorities, i.e. the jurisdiction rule.

Shuai Guo
16 November 2018

The research is conducted from an international insolvency law perspective. A modified universalism approach is chosen, taking into account the balance of conflict of interests between effective resolution and protection of local interests.

Regarding the parent-branch resolution, the home authority should be able to commence a main resolution proceeding, while the host authority should be able to commence either a supportive secondary resolution proceeding or an independent secondary resolution proceeding.

Regarding the parent-subsidiary resolution, in spite of the desire to take a global resolution action, the current legal framework only allows a host resolution proceeding for foreign subsidiaries. This paper continues to propose the application of the head office functions test developed in the international insolvency law, so that foreign subsidiaries can be subject to the home main resolution proceeding.

Medal winning paper

This publication is a Silver Medal winning paper in the competition of the International Insolvency Institute (III) 2018 Prize in International Insolvency Studies. III is a non-profit, limited membership organisation dedicated to advancing and promoting insolvency as a respected discipline in the international field.

The contribution has been published in Norton Journal of Bankruptcy Law and Practice (2018), Vol. 27, No.5. The same issue included two other award-winning papers as well as seven articles written by III Members in conjunction with the conference “Bankruptcy's Universal Pragmatist” to honour Prof. Jay Westbrook, which was held in Austin, Texas in February 2018. The full-text article can also be found at the III website.

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