Capital Markets Law Journal Advance Access published November 28, 2014 – Royce Miller

“Financial institutions (FIs) provide services that are critical to the smooth operation of the global economy and every national economy. Banks look after their customers’ money and provide money transmission services so that customers can be paid their salaries, pay their bills and withdraw cash through ATMs. They provide credit to individuals and businesses. They also provide infrastructure and services that corporate treasuries, pension funds, other investment funds, institutional investors and governments use to hold their cash and securities, facilitate cross-border transfers, and access central counterparties (CCPs), clearing systems and other financial market infrastructures (FMIs). Insurers among other things provide risk transfer mechanism under which insurers take the risks of large and potentially uncertain losses and in return provide a sense of security for individuals and businesses. Most FIs are commercial entities that aim to generate profits for their shareholders, and like any other commercial company they may fail if they are badly run or have a flawed business model. If a large FI does fail, it is likely to cause significant disruption unless there is a way in which critical services can continue.”