ABSTRACT
This chapter examines both the protection of the depositor of a credit institution and the protection afforded to the investor, that is, the customer of an investment firm. There are historically two opposing traditions: the laissez-faire approach, with its reluctance to sanction any form of protection scheme; and the rigid approach, with its traditional concern for the customer affected by the insolvency of the bank. The chapter discusses a legal approach to bank insolvencies, which can differ significantly depending on the respective jurisdictions, legal traditions and economic scenarios existing in each case. In some countries, specific proceedings for the liquidation of banks have been put in place that derogate from the normal reorganisation and winding up proceedings which apply to commercial businesses. This usually implies that a judicial decision affecting a financial institution such as a declaration of insolvency, cannot be adopted without a form of cooperation with the supervisory authority.
