Bankruptcy regimes regulate the efficient exiting of the market, and make the resolution of multiple creditors’ conflicting claims more orderly, resulting in more extensive opportunities for recovery by both the bankrupt entity and its creditors. Stronger creditor rights improve access to finance.
In addition, to the extent that consolidation results in a greater concentration of payment flows, the potential effects of an operational problem may increase. These and other developments imply that central bank oversight of the risks in interbank payment systems is becoming more closely linked with traditional supervision of individual institution safety and soundness.