There are about 4600 FDIC insured banks in the United States as of June 2023.[1] Sometimes deposit insurance prevents bank failures and sometimes it does not. There were four very small bank failures in 2020.[2] There were no bank failures in 2021 or 2022.[3] In 2023, after more than two years without a bank failure […]
The March 2023 run on Silicon Valley Bank spurred renewed debate about how to structure deposit insurance to best eliminate future bank runs. This Article argues, however, that deposit insurance cannot be relied upon to eliminate all bank runs, especially if technological developments create potential new bank run triggers that deposit insurance may not be […]
The public rightly considers the traditional banking system expensive, slow, and unfair. In response, technology companies have developed an ‘open banking’ sector. They combine transaction data from financial institutions with other datasets to develop applications for additional financial services, including personalized financial management and credit underwritten by data that credit bureaus have not historically collected, […]
This Essay considers the role of bankruptcy law in the legal ecosystem that regulates banks and other financial intermediaries. It uses the recent spate of bank and crypto intermediary failures to consider the role of bankruptcy courts (and other resolution institutions) in protecting both customers, and the stability of the financial system when the instability […]
The Federal Home Loan Bank system is a $1.3 trillion government-sponsored enterprise that operates primarily for the benefit of member financial institutions. Federal Home Loan Bank members enjoy generous dividends and ready access to fresh liquidity. The biggest beneficiaries are the biggest users of the system, including the largest banks and insurance companies in the […]
The source-of-strength doctrine is a long-standing pillar of bank regulation. It holds that a bank holding company (BHC) is to serve as “a source of financial and managerial strength” for its bank subsidiaries. The doctrine, however, has always been more aspirational than actual. The doctrine has never clearly imposed any liability on BHCs. Thus, it […]
This Article offers a conceptual framework for analyzing public banking as an institutional form of finance. It examines the key elements of design of a public bank as a financial institution―its core functions, sources of funding, asset structure, and governance framework―and highlights the opportunities and challenges presented by various choices along these dimensions. By isolating […]