ABSTRACT
This chapter provides an analysis of the limitations and benefits of corporate insolvency law in coping with insolvent financial institutions. It also examines the relationship between corporate insolvency theory and bank resolution theory. Like non-financial companies, banks are not immune from insolvency if their businesses go under. Logically, banks are companies and should be subject to the same corporate insolvency rules of every nation. In the case of non-financial corporate groups, the development of preventive restructuring mechanisms shows that there is also a trend for early intervention in corporate insolvency law. To rescue a corporate group which may contain group going concern value, it may be too late to take actions if the whole group is already insolvent. Bank resolution tools can only be used when the public interest is met. That is to say, insolvency law is still the first line of recourse for a failed bank or other financial institutions.
