In the aftermath of the BCCI closure, which affected many countries, the BCBS produced a paper in 1992 on the difficulties confronted. 10 Arguably, the authorities pulled their punches slightly. But, in any case, so far as I can tell, nothing was done outside of Europe, where insolvency law for banks was adapted. In particular, the EU  8  George Blunden chaired the Basel Committee when the original document was produced; and Peter Cooke did so in the 1980s. 9  In a single-entity insolvency regime, the home country authorities would seek to apply a single main insolvency proceeding to a bank incorporated in their jurisdiction and to all its branches in other countries. This is sometimes referred to as a universal approach to cross-border insolvency. This contrasts with a separateentity insolvency regime, in which separate insolvency proceedings may be applied to the parent bank (by the home country) and its branches in other countries (by host countries); this constitutes a territorial approach to cross-border insolvency. 10  Basel Committee on Banking Supervision (1992). “The insolvency liquidation of a multinational bank”, Bank for International Settlements.
But, of course, it would also entail lower risk for bank equity and bond investors, and surely it is risk-adjusted returns that matter. And it would also deliver lower risk to society more generally, which matters hugely. To be clear, we want banks and the financial sector more generally to thrive. The institution I come from believes in a market economy, in capitalism. The financial sector has played an enormous role in the development of modern economies. But a regime in which banks can thrive standing on your own feet would be a better market – for all of us. BIS Review 83/2009  9