Is the Bankruptcy Code an Adequate Mechanism for Resolving the Distress of Systemically Important Institutions?

The President and members of Congress are considering proposals that would give the government broad authority to rescue financial institutions whose failure might threaten market stability. These systemically important institutions include bank and insurance holding companies, investment banks, and other large, highly leveraged, and interconnected entities that are not currently subject to federal resolution authority. Interest in these proposals stems from the credit crisis, particularly the bankruptcy of Lehman Brothers. That bankruptcy, according to some observers, caused massive destabilization in credit markets for two reasons. First, market participants were surprised that the government would permit a massive market player to undergo a costly Chapter 11 proceeding. A very different policy had been applied to other systemically important institutions such as Bear Steams, Fannie Mae, and Freddie Mac. Second, the bankruptcy filing triggered fire sales of Lehman assets. Fire sales were harmful to other non-distressed institutions that held similar assets, which suddenly plummeted in value. They were also harmful to any institution holding Lehman\u27s commercial paper, which functioned as a store of value for entities such as the Primary Reserve Fund. Fire sales destroyed Lehman\u27s ability to honor these claims. Lehman\u27s experience and the various bailouts (of AIG, Bear Steams, and other distressed institutions) have produced two kinds of policy proposals. One calls for wholesale reform, including creation of a systemic risk regulator with authority to seize and stabilize systemically important institutions. Another is more modest and calls for targeted amendments to the Bankruptcy Code and greater government monitoring of market risks. This approach would retain bankruptcy as the principal mechanism for resolving distress at non-bank institutions, systemically important or not. Put differently, current debates hinge on one question: is the Bankruptcy Code an adequate mechanism for resolving the distress of systemically important institutions? One view says no, and advances wholesale reform. Another view says yes, with some adjustments. This Essay evaluates these competing views: Section II discusses the current structure of the Bankruptcy Code and its limited ability to protect markets from failing systemically important institutions. Section III outlines policy responses. In Section IV, I conclude that the Code is indeed inadequate for dealing with failures of systemically important institutions. A systemic risk regulator is needed because a judicially administered process cannot move with sufficient speed and expertise in response to rapidly changing economic conditions

Writing in Britain and Ireland, c. 400 to c. 800

No abstract available

Mitochondrial dysfunction and biogenesis: do ICU patients die from mitochondrial failure?

Mitochondrial functions include production of energy, activation of programmed cell death, and a number of cell specific tasks, e.g., cell signaling, control of Ca2+ metabolism, and synthesis of a number of important biomolecules. As proper mitochondrial function is critical for normal performance and survival of cells, mitochondrial dysfunction often leads to pathological conditions resulting in various human diseases. Recently mitochondrial dysfunction has been linked to multiple organ failure (MOF) often leading to the death of critical care patients. However, there are two main reasons why this insight did not generate an adequate resonance in clinical settings. First, most data regarding mitochondrial dysfunction in organs susceptible to failure in critical care diseases (liver, kidney, heart, lung, intestine, brain) were collected using animal models. Second, there is no clear therapeutic strategy how acquired mitochondrial dysfunction can be improved. Only the benefit of such therapies will confirm the critical role of mitochondrial dysfunction in clinical settings. Here we summarized data on mitochondrial dysfunction obtained in diverse experimental systems, which are related to conditions seen in intensive care unit (ICU) patients. Particular attention is given to mechanisms that cause cell death and organ dysfunction and to prospective therapeutic strategies, directed to recover mitochondrial function. Collectively the data discussed in this review suggest that appropriate diagnosis and specific treatment of mitochondrial dysfunction in ICU patients may significantly improve the clinical outcome