The insolvency liquidation of a multinational bank

Introduction

This paper discusses the insolvency liquidation of a multinational bank using the Bank of Credit and Commerce International S.A. (BCCI S.A.) as a case study. It is based on a review of the events that occurred after the decision to close the bank was taken and an analysis of insolvency liquidation laws in Luxembourg, the United Kingdom and the United States. The purpose of the analysis is to help supervisors shape their goals, assess their responsibilities and refine supervisory practices in the light of the issues that could surround the failure of a multinational bank.

This topic has proved to be complex. A survey of the laws of just three countries has identified a number of basic issues the study group believes could arise in the insolvency of any multinational bank. The resolution of these issues in any particular case, however, will depend upon the interaction of the laws of the various jurisdictions involved. The study group's objective in this paper is to make general observations which may be useful to supervisors.