Insolvency determination is central to the formal insolvency and bankruptcy proceedings of a debtor entity. In determining whether company solvent or insolvent, two tests are generally used by courts across all jurisdictions: Commercial Cash Flow Balance Sheet test. While enacting & Bankruptcy Code in 2016, India has moved away from traditional dual test approach followed Indian under Companies...

We analyze the effects of capital adequacy regulation on bank insolvency and aggregate investment. We show that while the risk of bank insolvency may be reduced there are economic costs arising from repercussions of regulation on aggregate economic activity. Solvency regulation restricts loan supply and has adverse effects on investment. Using a model of the banking system that is characterized...

■ To avoid insolvency, insurers must charge adequate premiums to pay policyholder claims. ■ Risk classification groups together individuals with similar levels of risk and expected costs, and permits insurers to charge an adequate premium. ■ If individuals purchase insurance on the basis o f health information that is unknown to the insurer, adverse selection results. Adverse selection means th...

This paper provides a compact framework for banking regulation analysis in the presence of uncertainty between systemic liquidity and solvency shocks. Extending the work by Cao & Illing (2009a, b), it is shown that systemic liquidity shortage arises endogenously as part of the inferior mixed strategy equilibrium. The paper compares different traditional regulatory policies which intend to fix t...

After the 2007-2008 subprime financial crisis considering bankruptcy evaluation for the banking industry becomes vital. In line of that, this study aims to analyze the bankruptcy profile of foreign versus domestic Islamic banks operating in Malaysia. This study predicted 40% and 75% bankruptcy in the subjected samples of foreign and domestic Islamic banks of Malaysia respectively. However, the ...

This contribution develops a blueprint for a European fiscal union. We argue that a viable European fiscal union can be constructed without joint liability for public debt or a centralized government with a large common budget. Such a fiscal union should combine elements of market discipline with stabilisation in case of asymmetric shocks. Our proposal addresses the shortcomings of most other r...