Abstract

Chapters 10 and 11 deal with banks in distress. For bank supervisors, this presents the ultimate challenge. Much regulatory law relating to solvency and the conduct of business is intended to prevent this situation from occurring. However, since the time that banking emerged as a distinct business, banks have collapsed or teetered on the edge of collapse, and no amount of good regulation will prevent this from happening in the future. Barings Bank, which recently failed, had already faced collapse in the 1890s (and had to be rescued by the Bank of England then). History tends to repeat itself.