Overview

The Federal Reserve Banks of Richmond and Philadelphia held a workshop on financial firm bankruptcy at the Charlotte Branch of the Richmond Fed on July 25-26, 2011. Researchers from academia and the Fed discussed bankruptcy policy topics related to the failure of large financial institutions.

On the first day, the workshop focused on the preferential treatment of derivatives and repos during the bankruptcy process. Some believe this policy helps to mitigate systemic risk by maintaining the ability of sellers of derivatives to perform on their contracts. Others think it contributes to systemic risk by encouraging excessive risk-taking and runs on collateral. The second day of the workshop focused on proposals to reform the bankruptcy code with respect to financial-firm failures as a supplement to the Orderly Liquidation Authority created by the Dodd-Frank Act.

Audience

Policymakers, practitioners, and scholars

---

Agenda

Monday, July 25 — Bankruptcy and Derivatives

12:00 p.m. – 1:00 p.m.
Lunch Buffet

1:00 p.m. – 1:15 p.m.
Welcome: Jeffrey M. Lacker, President, Federal Reserve Bank of Richmond

1:15 p.m. – 2:15 p.m.
David Skeel, University of Pennsylvania, "Transaction Consistency and the New Finance in Bankruptcy"
Bio  Slides  Paper

2:15 p.m.
Break

2:45 p.m. – 3:45 p.m.
Franklin R. Edwards, Columbia University, "Derivatives, Bankruptcy, and the Dodd-Frank Act"
Bio  Slides  Paper

3:45 p.m.
Break

4:00 p.m. – 5:00 p.m.
Douglas W. Diamond, University of Chicago, "Treatment of Derivatives in Resolution: Perspectives from Debt Theory"
Bio

5:30 p.m.
Reception

6:30 p.m.
Dinner

Tuesday, July 26 — Alternative Failure Resolution Approaches

8 a.m. – 9:00 a.m.
Breakfast

9:00 a.m. – 10:00 a.m.
Thomas Jackson, University of Rochester, "Making Bankruptcy Work: A Proposed Chapter 14 for Large Financial Institutions"
Bio  Slides  Paper

10:00 a.m.
Break

10:15 a.m. – 11:15 a.m.
Robert R. Bliss, Wake Forest University, "Resolving Insolvent LCFIs: The Case for Reorganization"
Bio  Slides  Paper

11:15 a.m. – 12:15 p.m.
Viral V. Acharya, New York University, "Resolution Authority"
Bio  Slides  Book Chapter  Book Chapter  Paper

12:15 p.m. – 12:30 p.m.
Wrap-up: Charles I. Plosser, President, Federal Reserve Bank of Philadelphia

12:30 p.m.
Lunch

Resources/Presentations

Agenda (PDF)

Overview and Speaker Biographies